EC rejects request by Germany to review deal

EC rejects request by Germany to review deal
Published: 07 January 2014


The European Commission (EC) has rejected a request from Germany to refer the planned acquisition of Cemex West by Holcim to the German competition authority for assessment under national competition law.

The EC concluded that the geographic scope of the affected cement markets is wider than national and that therefore the Commission cannot refer the assessment of the transaction to Germany. The commission has until 31 March 2014 to take a final decision.

In the proposed transaction Holcim intends to acquire part of Cemex’ activities in cement, ready-mix concrete, aggregates and cementitious materials in western Germany and a small number of plants and sites located in France and The Netherlands.

In September 2013, Germany submitted a referral request under Article 9(2)(a) of the EU Merger Regulation. Under the Regulation, the Commission has exclusive jurisdiction to assess mergers above certain turnover thresholds. It allows the Commission to refer all or part of the assessment of a case to a Member State provided that the competitive effects are restricted to purely national or smaller than national markets.

The German competition authority submitted that the transaction threatened to affect significantly competition in the cement markets in Northern and Western Germany. It contended that those markets present all characteristics of distinct markets within Germany within the meaning of Article 9(2)(a) of the EU Merger Regulation. It therefore requested a full referral of the transaction so as to examine the transaction itself.

Following an extensive investigation, the commission concluded that the relevant cement markets affected by the transaction are not national or narrower than national in geographic scope but include territories outside of Germany, such as parts of Belgium, The Netherlands and the Northeast of France. "This finding takes into account the existence of substantial cross-border trade of cement and the results of the commission's market investigation regarding the competitive dynamics of the cement sector. As one of the conditions for referral under Article 9 of the Merger Regulation is not met, the commission could not refer the assessment of the transaction to the German competition authority," it said in a statement.

The commission will therefore continue its in-depth investigation into the proposed transaction, opened in October 2013.