Antimonopoly committee conducts market test on CRH deal

On 1 August, the Antimonopoly Committee of Ukraine (AMCU) conducted a market test for the acquisition of two Buzzi cement plants by CRH. This test was the penultimate step on the way to finalising the deal. 

The market test was comprised of surveys from industry stakeholders such as consumers, industry experts and other market participants. The AMCU often uses this tool to assess the viability of large-scale mergers and acquisitions.

The test follows the AMCU announcement on 25 July which laid out the conditions of the deal under which Ireland-based CRH will be allowed to purchase Volyn Cement in the Rivne region and Yugcement in the Mykolaiv region from Italy-based Buzzi. The terms of the deal stipulate that CRH must transfer 25-28 per cent of the shares in Dyckerhoff Cement Ukraine to an independent investor within nine months after the acquisition. CRH is also obligated to inform the state regulatory body about the transfer of the assets, cement production volumes and other performance indicators.

Simultaneously, the investor maintains production capacity, and ensures equal conditions and market prices for consumers of cement. CRH is committed to investing in facilities, modernising its current manufacturing efforts and improving working conditions at its facilities.

The deal is valued at EUR100m (US$109.3m) and will be the largest investment deal in the construction market since the start of the Russia-Ukraine war. Industry experts have noted that the potential deal is vital for the country’s reconstruction. They further suggest that, as cement is a key building material, foreign investment in domestic production will be key in avoiding shortages during the rebuilding efforts. 

CRH currently owns three cement plants in Ukraine. These are Mykolaivcement, Podilskiy Cement and Odessa Cement.

Volodymyr Kuzio, deputy minister of economy of Ukraine, stated that the quality of life of the country’s citizens depends on the willingness of foreign and domestic companies to invest in the manufacturing sector. He continued, “Foreign investment in Ukraine's construction industry is extremely important today, as it, along with the strategy of financing the construction of housing and industrial facilities, will indirectly affect economic growth. As a result, demand for construction materials will grow, Ukrainian companies will be able to modernise their facilities, and Ukrainians will have the opportunity to get affordable housing and jobs.” 

CRH is one of the world’s largest producers of construction materials and solutions. It operates under the Cemark brand name in Ukraine and has invested approximately US$500m in the country since 1999. Since the start of the war, CRH has invested US$80m in Ukraine including US$34m in the construction of a cement terminal in the Kyiv region. The company also donated more than US$1m through UNICEF in 2022.