Housing in Southern Africa September 2015

Cement & Concrete

Commission blocks Raubex’s acquisition The Competition Commission has blocked Raumix Aggregates, asubsidiaryof theRaubexGroup, acquiring OMV Kimberley, a construction quarry and ready mix company.

R aubex planned to acquire the quarrying company as well as OMV Kimberley Mining, post merger Raumix and ultimately Rau- bex would control the OMV Group. The merging parties had notified the Competition Commission about this acquisition in 2014 but had elect- ed not to go ahead with it given the concerns raisedby the Commission at the time. The Commission has found that the merged entity would have the ability and the incentive to raise the costs of its rivals in the down- streammarket for road surfacing and rehabilitation in the Kimberley area. In this proposed transaction, the Commission’s concerns remain. The proposed transactionwould substan- tially prevent or lessen competition in the market for the production and supply of aggregates used in the

surfacing of national roads in the Kimberly area. Other than the OMV Group, there is no other supplier in Kimberley that has supplied the road stones required for the surfacing of national roads. With the acquisition, Raubex would have the ability and incen- tive to raise costs to its competitors downstream in instances where they would require road stones that meet the Committee of Land Transport Officials (COLTO) specifications as re- quired by the South African National Roads Agency (SANRAL). The Commission considered pos- sible supply remedies proposed by the merging parties, but concluded

that the remedies did not adequately address the concerns. Also, the merging parties did not make any submissions on efficiencies or pro- competitive gains that would allevi- ate the concerns. The Raubex Group of companies is active in a range of activities such as road construction (including surfac- ing, rehabilitation andmaintenance), the production and supply of value added bitumen products, the pro- duction and supply of aggregates from quarries, contract crushing of aggregates and other raw materials, the production and supply of asphalt andmaterials handling and benefac- tion for the mining industry. ■

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