(Adds European Commission and HeidelbergCement decline comment,
no one responded at Cemex Croatia)
By Foo Yun Chee
BRUSSELS, March 28 A joint bid by German cement
producers HeidelbergCement and Schwenk for Cemex's
Croatian business faces a European Union veto, two
sources said on Tuesday.
The European Commission, which opened an investigation into
the deal in October, has not been convinced so far by their
offer to lease a terminal on the Dalmatian coast to a rival to
address its concerns, the sources said.
There is still a chance that European Competition
Commissioner Margrethe Vestager may be convinced by the
concession, the people said. She told lawmakers last week that
it was important for companies to have access to affordable
prices in Croatia.
But if the deal is vetoed, it would be third for Vestager
after she scuppered CK Hutchison Holdings' bid to buy
Telefonica's O2 UK last year. She is due to reject on
Wednesday the proposed merger of Deutsche Boerse and
the London Stock Exchange.
The EU competition authority has said the Cemex Croatia deal
may eliminate a significant player in a concentrated regional
market, boost Cemex Croatia's market power in southern Croatia
and lead to price hikes in grey cement.
HeidelbergCement and Schwenk want to buy Cemex Croatia from
Mexico's Cemex through their Hungarian joint venture Duna Drava
Cement (DDC) in a deal worth about 250 million euros. DDC is the
largest importer in the region and Cemex Croatia its biggest
The Commission, which is scheduled to decide on the merger
by April 18, and HeidelbergCement declined to comment. Cemex
Croatia did not respond to requests for comment.
In December HeidelbergCement and Schwenk challenged the
Commission's decision to review the case rather than leaving it
to the Croatian competition agency. It will take months before a
lower court in Luxembourg hears the cases.
(Additional reporting by Georgina Prodhan in Frankfurt and Igor
Ilic in Zagreb; editing by Alexander Smith)