The Kyiv Commercial Court has canceled the decision that allowed Irish CRH to acquire the Dyckerhoff group of companies in Ukraine, previously owned by Italy’s Buzzi.
The decision, issued by AMCU in September 2024, gave the green light to the Irish company’s subsidiary – CRH Ukraine B.V. – to acquire the Dyckerhoff group of companies in Ukraine, previously owned by Italy’s Buzzi.
Interfax-Ukraine reported it as based on ruling No. 910/13150/24 dated Feb.13.
In June 2023, Buzzi announced it wanted to sell its businesses in Eastern Europe to CRH – which included two integrated cement plants, one close to Rivne (in the North-West) and the other in Mykolaiv (in the South). The total cost of the assets was €100 million ($112 million).
“The production units are flanked by two terminals for the distribution of cement. The group also operates in the ready-mix concrete sector in Kyiv, Odessa and Mykolaiv,” the company wrote in its press release.
After several discussions about whether acquiring these assets would give CRH a monopoly position on the Ukrainian market with Ukraine’s AMCU, the AMCU initially allowed the acquisition in September last year, the AMCU wrote.
But on Thursday, Ukraine’s court canceled the decision in a lawsuit filed by another major player on Ukraine’s market, the Kovalska Group, which works in the concrete, building materials and real estate businesses.
“The main assets of the Kovalska group for the production of concrete are concentrated in Kyiv, with its market share in Kyiv and the surrounding region at over 50%,” the Kovalska CEO Serhiy Pylypenko previously told Ukraine’s media outlet Ekonomichna Pradva.
AMCU has never had any criticism of Kovalska’s actions and potential monopoly status, he said. If CRH acquired Buzzi’s businesses, it would have become Kovalska’s direct competitor.
At the same time, CRH could have been perceived as acquiring a monopoly by AMCU – the company first filed a request to acquire Buzzi’s business in July 2024 and it was declined. AMCU saw risks of CRH potentially monopolizing the market share, asking the Irish company to fix risks that can cause abuse of the market share after the acquisition.
After responding as required, AMCU gave the green light to acquire the asset which the Kyiv court does not now agree.
According to materials on the case, the lawsuit argued that the AMCU’s decision was unlawful and unsubstantiated due to the committee’s failure to fully investigate and establish the relevant circumstances of the market concentration, Interfax-Ukraine wrote.
The key violation AMCU made was giving the green light to CRH even though the Irish company appointed a member of the supervisory board of the CRH-owned Podilsky Cement JSC, but they should not have done so according to Ukrainian law.
“CRH has already breached some of the commitments it undertook,” the court ruled.
One such obligation is that individuals appointed to Dyckerhoff Cement’s top management must not hold positions in entities affiliated with CRH Ukraine B.V. in Ukraine.
“However, on Oct. 11, 2024, during an extraordinary general meeting of Dyckerhoff Cement Ukraine PJSC, Mariusz Tomasz Bogacz — a member of the supervisory board of Podilsky Cement JSC, which is 100% owned by CRH Ukraine B.V. – was appointed to the supervisory board,” the court wrote in its ruling.
Interfax-Ukraine wrote that CRH Ukraine B.V. is currently appealing the ruling, arguing that the acquisition of factories “was carried out in full compliance with all legal requirements”.
CRH’s acquisition was also backed by investments from the European Bank for Reconstruction and Development (EBRD) – in December 2023 CRH signed a mandate letter with the bank for a joint acquisition of Buzzi’s assets in Ukraine, according to Interfax-Ukraine.
CRH has operated in Ukraine since 1999, with its cement operations in the country have been conducted under the Cemark brand since November 2021 which includes Podilsky Cement JSC (Khmelnytskyi region), Cement LLC (Odesa), and Mykolaivcement PJSC (Lviv region), the media outlet reported.
CRH’s operations in Ukraine also include the production of concrete and reinforced concrete products. The PoliBeton Energo plant in Bila Tserkva specializes in manufacturing power line supports. The PoliBeton concrete plant in northern Odesa became part of CRH in 2020, Interfax-Ukraine said.
CRH is a global leader in construction materials and the largest in North America and Europe, operating 3,200 facilities in 28 countries. CRH’s American depositary shares are traded on the New York Stock Exchange.