The plans of HeidelbergCement and Schwenk to acquire Cemex's Croatian subsidiary will be subject to review by the European Commission (EC).

The transaction would result in the merger of Cemex Croatia, the largest domestic cement producer, with Duna Drava Cement, the largest importer and a subsidiary of the two German cement producers.

After a preliminary analysis, the EC concluded that "the proposed transaction would remove a significant competitor in an already concentrated regional market" and thus "reduce the competition in Croatia, said in a statement the European Competition Commissioner, Margrethe Vestager.

The main concern centres on Dalmatia, where Cemex operates three cement plants and faces a significant competition from DDC imports from Bosnia-Herzegovina. Moreover, all cement terminals in the Croatian coastal ports are under control of Cemex or LafargeHolcim’s local subsidiary.

"With this transaction, the remaining current or potential suppliers could only put limited pressure on the merged company due to transportation costs to reach the south of Croatia", added Ms Vestager.
The EC has until 23 February 2017 to decide if it approves the operation.