Holcim Nears EU Approval for €1.85B Xella Deal After Romanian Asset Sale Offer
Holcim's Acquisition of Xella and EU Antitrust Approval
By Foo Yun Chee
Background of the Xella Acquisition
BRUSSELS, June 1 (Reuters) - World No. 2 cement maker Holcim is set to win EU antitrust approval for its 1.85 billion euro ($2.15 billion) acquisition of German walling systems maker Xella after offering to divest a Romanian business to address competition concerns, people with direct knowledge of the matter said.
The deal, announced in October last year, will help Holcim diversify its business into the growing European refurbishment market worth around 250 billion euros a year.
Asset Divestment to Address Competition Concerns
Holcim last month put in an offer to sell some assets to the European Commission.
"As part of the European Commission's review of Holcim's acquisition of Xella, Holcim offered to put its standalone Adjud autoclaved aerated concrete (AAC) business in Romania up for sale pending the regulator’s test of the market," the company said in a statement.
Implications of the Romanian Business Sale
The imminent EU approval and the proposed sale of the Romanian business have not been previously reported.
Holcim's Strategic Focus and Market Impact
Zug, Switzerland-headquartered Holcim is betting on its building products business, which offers higher growth and profitability than its traditional cement and aggregates business, driven by demand for roofing, insulation and prefabricated systems.
The Xella deal underscored its focus on more expensive sustainable products to bolster its margins.
EU Commission's Review Process
The Commission, which acts as the EU competition enforcer and has been seeking feedback from rivals and customers on Holcim's offer, declined to comment.
The EU competition enforcer is scheduled to decide on the deal by June 12.
($1 = 0.8612 euros)
(Reporting by Foo Yun Chee, additional reporting by Oliver Hirt in Zurich; Editing by Susan Fenton)
