Treasury opposes giant concrete merger

The Finance Ministry cites a Housing Ministry estimate that cement amounts to 10-20% of the construction cost of residential buildings.

The Ministry of Finance opposes the acquisition of Israel's second largest concrete company Hanson Israel Ltd. by Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH), which owns Nesher Israel Cement Enterprises Ltd. The objections are contained in a Budget Division position paper sent to Antitrust Authority director general Ronit Kan two weeks ago.

The ministry wrote, "We believe that approval of the merger is liable to hurt competition in the cement industry."

The Ministry of Finance added that Ministry of Housing and Construction officials estimate that cement amounts to 10-20% of the construction cost of residential buildings. The Ministry of Finance argues that the acquisition of Hanson Israel by Nesher, which has a monopoly in the cement industry, is liable to "hinder government policy to make the inputs market more sophisticated, as part of the goal to halt the rise in housing prices."

IDB subsidiary Clal Industries and Investments Ltd. (TASE: CII) owns 75% of Nesher's parent company Mashav, and Ireland's CRH plc (NYSE; LSE; Dublin: CRH). Mashav wants to acquire Hanson Israel from Germany's Heidelberg Cement AG (XETRA: HEI) for NIS 450 million, plus the company's cash.

IDB said in response, "We were surprised to learn that there is a Budget Division position paper on the Mashav-Hanson merger about which we are unaware."

Published by Globes [online], Israel business news - www.globes-online.com - on December 3, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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