The Commission for Protection of Competition (CPC) has asked for additional guarantees and commitments from Vassiliko Cement and Cyprus Cement officials before deciding on whether or not to approve or reject the application to merge their operations.
After a marathon meeting that ended late Tuesday, high ranking officials from both Vassiliko and Cyprus Cement gave commitment to submit new guarantees and commitments according to which they will not be in a position to strangle competition if their proposed merger is allowed to proceed. The CPC is scheduled to meet again on Thursday, July 26 to reach a final decision.
The Commission is worried that if the merger is allowed to proceed in its present form, the new entity under the control of Vassiliko Cement will have absolute control over the local cement market in the sense that it will be the sole importer, producer and main distributor of cement, clinker and related products such as concrete.
Vassiliko and Cyprus Cement officials need to prove and give commitments as to how and which areas of activity they will exit from and how they will give assurances on a price freeze, before they are allowed to proceed with the merger.
More importantly, they need to give practical and reasonable assurances that their commitments will be adhered to. There is a good chance that Vassiliko will need to exit out of the importing of cement as well as having production of ready-mix concrete, two areas that need to be “sacrificed” before the CPC moves to give the go-ahead for the merger after it is satisfied that the cement market will not be cornered by the major entity to be formed as a result of the merger.