AMCU Approves CRH’s Acquisition of Two Cement Plants in Ukraine

by Roman Cheplyk
Friday, July 26, 2024
2 MIN
AMCU Approves CRH’s Acquisition of Two Cement Plants in Ukraine

The Antimonopoly Committee of Ukraine (AMCU) has approved CRH’s purchase of two Buzzi cement plants, marking a significant investment in the country’s construction industry

Key Highlights:

  • Acquisition Details: CRH, one of the world's largest building materials manufacturers, will acquire Volyn-Cement and Yugcement, owned by Buzzi's subsidiary Dickerhoff Cement Ukraine. The transaction's value exceeds $500 million.

  • AMCU Conditions:

    • CRH must transfer 25-28% of Dickerhoff Cement Ukraine shares to an independent investor within 9 months. The European Bank for Reconstruction and Development (EBRD) is expected to be the investor, following a mandate letter signed in December 2023.
    • CRH will ensure independent control, maintain production capacity, guarantee equal market conditions and prices for cement consumers, and regularly report production and supply volumes to the AMCU.
  • Investment and Modernization: CRH is expected to invest in and modernize the acquired plants, expanding their production capabilities, retaining jobs, and improving working conditions.

  • Regional Impact: Mykolaiv region, heavily affected by the conflict, will benefit from CRH's investment, aiding both immediate and long-term reconstruction efforts.

  • Local Production and Economic Impact:

    • 90% of building materials needed for Ukraine's reconstruction can be produced domestically. Local production could add $21 billion to Ukraine's GDP.
    • Cement production in Ukraine increased to 7.4 million tons in 2023, but the reconstruction peak will require about 14 million tons annually.
  • Industry Insights:

    • Investments and modernization increase market competition, improving product quality and affordability.
    • Attracting foreign investments is crucial for boosting Ukraine's cement production and preparing for extensive post-war reconstruction.
  • CRH's Commitment: Since 1999, CRH has invested around $500 million in Ukraine. Despite the conflict, CRH invested $80 million, including $34 million in a Kyiv cement terminal, and made significant donations to support Ukraine.

Conclusion

CRH's acquisition of two Buzzi cement plants in Ukraine is set to significantly boost the country's construction and reconstruction capabilities. The AMCU's approval and conditions ensure independent oversight and market stability, while CRH's investment commitment underscores its role in Ukraine's economic recovery.

 

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