CRH risks losing EUR 100 mln in Ukrainian assets following court's revocation of antitrust clearance for Dyckerhoff deal
On February 13, the Commercial Court of Kyiv annulled a decision by the Antimonopoly Committee of Ukraine (AMCU) that had granted approval for CRH Ukraine B.V., a subsidiary of the Irish construction materials giant CRH, to acquire the Dyckerhoff group of companies in Ukraine from Italy's Buzzi.
This is according to court ruling No. 910/13150/24, reviewed by Interfax-Ukraine.
In autumn 2024, after securing the green light from the AMCU, CRH completed the acquisition of the Dyckerhoff assets in Ukraine from Buzzi for EUR 100 million.
Court filings show that the plaintiff – Industrial and Construction Group Kovalska – argued the AMCU's decision was unlawful and unsubstantiated due to an incomplete investigation of the facts relevant to the merger case, including insufficient analysis of the ready-mix concrete market.
The court also noted that CRH had already violated certain post-merger commitments. One such obligation required that, for five years following the transaction, general and commercial directors, as well as members of the executive and supervisory boards of PJSC Dyckerhoff Cement Ukraine, must not hold similar positions in other companies under CRH Ukraine B.V.'s control within Ukraine.
However, during an extraordinary general meeting of PJSC Dyckerhoff Cement Ukraine on October 11, 2024, Mariusz Tomasz Bogacz – a member of the supervisory board at JSC Podilsky Cement, fully owned by CRH Ukraine B.V. – was appointed to Dyckerhoff's supervisory board, thereby breaching this condition.
The court ruling was published on March 20. In response to a request from Interfax-Ukraine, CRH Ukraine B.V. responded that it is currently being appealed. "We are aware of the decision of the Kyiv City Commercial Court. The agreement to acquire the Volyn-Cement and Yug-Cement plants was implemented in full compliance with all legal requirements and with due approval of the Antimonopoly Committee of Ukraine. Since the court decision is being appealed, we will not provide further comments. We trust the legal process," the company's press service said.
The company also added that the powers of Mariusz Tomasz Bogacz as a member of the Supervisory Board of JSC Podilsky Cement were terminated on October 8, 2024, as reported on both the company's website and the information resource of the National Securities Commission (https://c3.cemark.ua/origin/factory_documents/423/69711f65f5d6251040950cf9c0fe1f02.pdf)
In September 2024, the AMCU approved CRH Ukraine B.V.'s acquisition of shares in PJSC Dyckerhoff Cement Ukraine, allowing it to surpass a 50% voting threshold in the company's governing body – subject to several conditions, including the involvement of an independent investor for a 25-28% stake. The European Bank for Reconstruction and Development (EBRD) was expected to take on that role, following a mandate letter signed with CRH in December 2023 for a joint acquisition of Buzzi's Ukrainian assets. The AMCU had been reviewing CRH's concentration request since September 2023.
In June 2023, Italy's Buzzi, which had been blacklisted by Ukraine's National Agency on Corruption Prevention as an international sponsor of war, agreed to sell part of its Eastern European business to CRH through its Dyckerhoff GmbH subsidiary. The deal included Ukrainian assets – two cement plants: Volyn-Cement (Zdolbuniv, Rivne region) and Yug-Cement (Olyshanske, Mykolaiv region).
CRH has operated in Ukraine since 1999. Since November 2021, its Ukrainian cement operations have been unified under the Cemark brand, comprising JSC Podilsky Cement (Khmelnytsky region), Cement LLC (Odesa), and PJSC Mykolaivcement (Lviv region).
CRH's business in Ukraine also includes the production of concrete and reinforced concrete products. The Bila Tserkva-based PoliBeton Energo factory specializes in manufacturing power line pylons. The PoliBeton concrete plant in northern Odesa joined CRH in 2020.
CRH is the world's leading construction materials company and the largest in both North America and Europe, with 3,200 sites in 28 countries and approximately 71,000 employees. The company also has operations in Asia. CRH's American Depositary Shares are listed on the New York Stock Exchange.