Cade makes recommendations for Cimpor bid

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Brazil: Cade, the Brazilian anti trust agency, has recommended that the acquisition of Portuguese cement producer Cimpor by Camargo Corrêa should be approved but that that Votorantim Cimentos should divest its stake in Cimpor.

In 2010, Camargo Corrêa teamed up with industrial conglomerate Grupo Votorantim to acquire 54% of Cimpor, blocking a bid by Brazilian steelmaker CSN in the process. Camargo Corrêa has since raised its stake in Cimpor to nearly 33%, later launching a Euro2.5bn bid for the rest of Cimpor in March 2012 at Euro5.50/share.

Camargo Corrêa's buyout of Cimpor could help competition in Brazil by reducing Votorantim's market share, Cade chief Olavo Chinaglia told the press in April 2012. Votorantim may have to sell some of its Brazilian cement assets to reduce its market concentration. The conglomerate's market share is about 40% nationally but reaches nearly 90% in some regions.

In November 2011 Cade found that Votorantim, along with Camargo Corrêa and four other rivals, colluded to fix prices, hampering competition in the Brazilian cement market during a construction boom. Further approval of Camargo Corrêa's purchase may depend on certain conditions, such as selling assets in some markets and avoiding participation in other cement companies.

Last modified on 23 May 2012

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