German cement producer HeidelbergCement AG and Italian producer Italcementi SpA have agreed to divest some US assets to settle the Federal Trade Commission's charge that their proposed $4.2 billion merger would likely harm competition in the United States, the FTC said on Friday.
HeidelbergCement and Italcementi, the second and fourth largest producers of cement in the world, will divest a cement plant in Martinsburg, Virginia, and up to 11 cement distribution terminals in six other states, the FTC said in a statement. The merger as proposed would harm competition for portland cement in five metropolitan areas: Baltimore-Washington; Richmond, Virginia; Virginia Beach-Norfolk-Newport News, Virginia; Syracuse, New York; and Indianapolis, Indiana, the commission said.
In the US, the two companies compete through their subsidiaries, Lehigh Hanson and Essroc Cement Corp, which are controlled by Heidelberg and Italcementi, respectively. The FTC said the merger as originally proposed would have reduced the number of competitively significant suppliers from three to two in each of those markets.
HeidelbergCement and Italcementi were not immediately available for comment. Last month, EU antitrust regulators said they had cleared HeidelbergCement's planned purchase of Italcementi on condition that it sold the target's Belgian activities. HeidelbergCement announced its plans to take control of Italcementi in July 2015, just three weeks after rivals Holcim and Lafarge completed their $44 billion cement mega-merger. The deal was HeidelbergCement's largest since its 2009 acquisition of Britain's Hanson Plc for 7.9 billion pounds.
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