Skanska to acquire Scancem

Skanska and Scancem cover the whole value chain in the construction sector. Scancem’s main activity is the production of key raw materials, primarily cement. Skanska and Scancem are active in the production of cement-based production materials (e.g. concrete) and other construction materials (e.g. bricks, plaster board). Scancem is the largest construction company in the Nordic region.

The Commission identified the relevant product markets as: cement, aggregates, ready-mixed concrete, dry concrete, pre-cast concrete products, and construction. The operation has a significant vertical impact (i.e. on companies at different levels in the production process) on all these markets. There is also a significant horizontal (i.e. between companies at the same level in the production process) overlap between the two companies on the Swedish concrete and aggregates markets. The Commission found that it would create a dominant position on the Swedish markets for ready-mixed concrete, dry concrete and pre-cast concrete products. It would also strengthen Scancem’s dominant position on the Swedish cement market. These effects would be substantially reinforced by the vertical effects resulting from the combined activities of Skanska and Scancem on the raw material markets, construction materials markets and on the construction market itself. Skanska’s competitors on the other hand are not at all vertically integrated. This will strengthen the overall dominance of the company and reduce possibilities for its competitors to engage in effective competition with Skanska. It will also serve as a significant barrier to entry at all levels of its activities.

The Commission nevertheless approved the operation under the following undertakings submitted by Skanska: restructuring of its cement business, divestiture of Skanska’s entire shareholding in Scancem within a certain period of time. Pending the divestiture, Scancem will continue to be managed as an entity separate and distinct from Skanska. The Commission considered these measures appropriate and cleared the operation. (OJ L183 16.07.99).