Cimpor acquisition good for competition

The buyout of Cimpor, Portugal, by Camargo Corrêa of Brazil would improve competition by reducing the market share of dominant player, Grupo Votorantim, according to Brazil’s antitrust regulator.

"In principal, I can say that would be better than Votorantim concentrating even more of the market. But I can't say that solution is enough," said Olavo Chinaglia, the head of the Brazilian antitrust agency Cade, reported Reuters.

Camargo Corrêa, the country’s second-largest construction group, launched a bit last week to buy out the two thirds of Cimpor it does not already own. Industry observers expect fellow shareholder Votorantim, which controls 40 per cent of the Brazilian market, to exit Cimpor in exchange for some international assets.

If Camargo Corrêa took over 100 per cent of Cimpor, it would double its market share in Brazil to nearly 20%, reducing Votorantims grip on the market. This would reduce some of the regulators concerns related to the ongoing inquiry into price fixing by Camargo Corrêa and four other rivals in the Brazilian market.