Competition Bureau approves Holcim-Lafarge merger
Holcim sell all of its Canadian operations and all associated assets.
OTTAWA — The federal Competition Bureau says it has given its approval, with conditions, to the takeover of Lafarge S.A. by Holcim Ltd. in a deal that will merge the world’s two largest cement companies.
The Competition Bureau said it had reached a consent agreement that will see Holcim sell all of its Canadian operations and all associated assets.
Under the agreement, Holcim will also sell one cement plant and five cement terminals in the US.
“The sale of the US cement plant is required to allow the Canadian assets to run effectively as a stand-alone business once they are no longer associated with other Holcim assets,” the bureau said in a statement.
The agreement requires Holcim to sell the assets to a single purchaser or in two packages to two purchasers.
The first package includes two cement terminals in Edmonton and Lethbridge, Alta., along with a cement plant in Three Forks, Mont., which the bureau said was essential to Holcim’s operations in Alberta.
The second package includes Holcim’s cement plants in Joliette, Que., and Mississauga, Ont., as well as many cement terminals, ready-mix concrete plants and other aggregates and construction facilities. It also includes five cement terminals in the northeastern US.
Meanwhile, the bureau said the commissioner of competition “has the sole discretion to approve a buyer for the assets to be sold under the agreement and will only do so if he concludes that a buyer will provide effective competition in Canada.”
“This agreement addresses the likely substantial lessening or prevention of competition that would otherwise arise in Canada from the merger of Holcim and Lafarge,” it added.
The bureau said that because the deal is a global transaction – Lafarge is based in France, Holcim in Switzerland – it co-ordinated with the US Federal Trade Commission and the European Commission.
Holcim currently employs about 2,600 people in Canada and manufactures cement, aggregates and ready-mix concrete and provides construction services, while Lafarge Canada is the largest producer of cement and concrete-related building materials in Canada.
Their merger will create the world’s largest cement company.
The US Federal Trade Commission said the combination of the two companies would have reduced competition for portland cement, a component of concrete, in 12 US cities and areas. It also would have reduced competition for a specialty type of cement called slag cement in the Mid-Atlantic and Western Great Lakes regions.
In order to gain FTC backing for the deal, Lafarge will sell its Continental Cement business along with a cement plant, a quarry and some distribution assets, while Holcim will sell several cement plants and distribution terminals.
The companies did not say how much revenue they receive from the businesses that are being divested. Lafarge said Denver-based Summit Materials Inc. would buy one cement plant in Iowa and seven terminals along the Mississippi river for $450 million.
Most of the assets are in the US, but one cement plant and two terminals are in Canada.
European regulators also required the two companies to sell off some assets, including businesses in Europe, Canada, Brazil and the Philippines. The companies said CRH PLC agreed to pay about $7.3 billion for those assets.
Holcim Ltd. is based in Switzerland and Lafarge SA is based in France. The companies hope to complete their combination in July.
© 2015 The Canadian Press