The proposed merger of Lafarge and Holcim will see the divestment of assets by both companies in up to 15 markets to satisfy market regulators. In this article, the future cement consumption level for each of these markets is presented in a set of forecasts especially commissioned by ICR. By Rob Roy, ROI Economic Consulting, USA.
With Lafarge and Holcim operating cement plants throughout the world and frequently sharing national markets, the upcoming merger of these two cement giants will require the divestment of some cement assets to prevent their combined market share from exceeding an anticompetitive threshold. This threshold is defined by government regulators and depends on many factors, including:
• how the market is defined
• its geographic and cement volume size
• number of competitors operating in the market, including importers, their relative size and joint-venture relationships.
In addition, the extent and intensity of antitrust enforcement varies widely among nations and governments. Sometimes the relevant market may comprise more than one nation, eg the Caribbean and ASEAN, or one nation may consist of several distinct regional, provincial or state markets, eg the USA and Canada.
All these factors weigh heavily on which assets Lafarge and Holcim will need to divest to receive regulatory approval for the merger.
