SA Commission approves Holcim / Lafarge merger with divestiture condition

The Competition Commission has approved the intermediate merger between Holcim Ltd (Holcim) and Lafarge S.A. (Lafarge) with conditions aimed at preventing Holcim from holding shares in both Lafarge and AfriSam.

The proposed transaction is such that Holcim will offer new Holcim shares to the Lafarge shareholders in a public exchange offer governed by French law. The merger will result in Holcim acquiring the majority of Lafarge's issued share capital.

The merging parties are both active in the market for cement and cementitious products and operate internationally. While Lafarge also operates in the South African market, Holcim exited this market a few years ago, save for a stake it held in AfriSam. The Commission found that such shareholding would present an undesirable structural link between competitors post-merger, as it provides Holcim with access to AfriSam's commercially sensitive information.

The Commission accordingly imposed a condition that Holcim divest of its shareholding in AfriSam within a stipulated period after approval of the merger. There were no other competition concerns in respect of the merger.