[Original] LafargeHolcim South Africa Merger Approved Prerequisite: Holcim Abandons Afrisam Equity

   Despite Lafarge's strategic importance in the South African cement market and Holcim's stake in South African cement producer Afrisam, the Competition Commission recently agreed to Lafarge-Holcim's proposed merger in South Africa on the condition that Holcim relinquish its stake in Afrisam and unwind its holding within three years of the Commission's approval of the merger.

   The Competition Commission said Holcim held an equity stake in Afrisam. If Lafarge and Holcim were to merge, Holcim's shareholding would create the possibility of gaining access to commercially sensitive information about Afrisam, which Afrisam would not like to see, and would be detrimental to Afrisam's ability to compete in the cement market.

   At the same time, the Competition Commission also pointed out that Holcim's holding of Afrisam may also lead to the merger of Lafarge and Holcim to conspire to compete with Afrisam. The Competition Commission agreed to LafargeHolcim's proposed merger in South Africa, taking into account the precedent of the South African cement industry ganging up against other competitors and the difficulty of investigating such collusion.