“Kovalska loses court case against the AMCU over the purchase of Buzzi cement plants
30 June 20:22
The Northern Commercial Court of Appeal of Kyiv upheld the appeal of the Antimonopoly Committee of Ukraine (AMCU) against Kovalska Group. The court rejected Kovalska’s request to cancel the AMCU’s permit for the acquisition of two cement plants by the international group CRH. The hearing was held on June 24.
The decision concerns one of the largest mergers and acquisitions (M&A) transactions in Ukraine during the full-scale war – the sale of cement plants in Rivne and Mykolaiv regions owned by Italian Buzzi to CRH. The purchase of the plants cost CRH EUR 100 million.
“Kovalska sought to invalidate the AMCU’s permit, expressing concern that even with the proposed restrictions, the deal could lead to excessive concentration and weaken competition. on February 13, the Kyiv Commercial Court sided with Kovalska and invalidated the Committee’s decision. In response, the AMCU filed an appeal, which was upheld by the court on June 24.
The deal was first discussed in 2023. That was when the international CRH group first announced its intention to acquire the assets of Italian Buzzi in Ukraine.
The AMCU authorized the purchase after more than a year of market analysis and consultations with industry experts. However, the Committee agreed to the concentration only if CRH fulfills a number of obligations.
These include the sale of 25-28% of the new assets to an independent investor, maintaining production and uninterrupted supply of cement, and not appointing people to senior positions who are also working in similar positions in other companies within the CRH group in Ukraine for five years after the transaction.
This is not the first legal attempt by Kovalska to influence the deal. Earlier, the company sought to join the AMCU proceedings as a third party, but the Supreme Court rejected Kovalska’s claims. Some media outlets, including Forbes, wrote that this may be due to Kovalska’s desire to gain control of these plants.
CRH is one of the world’s largest building materials producers. The company employs 80,000 people in 28 countries. It is a member of the Fortune Global 500 and is listed on the New York Stock Exchange (NYSE) and the London Stock Exchange (LSE).
CRH has been operating in Ukraine since 1999. The company adheres to the principles of sustainable development in its operations, so it implements modern technologies at its plants for environmentally friendly and safe production. Even during the full-scale invasion, CRH invested €180 million in Ukraine, including the construction of a €34 million cement terminal in Kyiv region.
What you need to know about Kovalska Group
Kovalska Industrial and Construction Group is one of the largest vertically integrated holdings in Ukraine, combining construction materials production and development. The roots of the group date back to 1956, when Kyiv-based Reinforced Concrete Products Plant No. 3 was operating, which later became the basis of Kovalska ICG.
Today, the group unites 13 enterprises located in Kyiv, Zhytomyr, Lviv, Kherson and Chernihiv regions. The company employs over 4,600 people. The company’s products include concrete, reinforced concrete structures, building mixes (Siltek), paving slabs (Avenue), aerated concrete and roofing materials.
“Kovalska has completed about 26-32 residential projects with a total area of more than 650-700 thousand square meters, handing over more than 7000 apartments to the population. The company builds housing mainly in remote metropolitan areas where prices are more affordable. Additionally, its portfolio includes commercial and industrial facilities, such as business campuses in UNIT.City and Nuvo Business Park in the center of Kyiv, built together with KDD Ukraine.
In addition to residential construction, Kovalska is actively expanding its manufacturing business. In Kyiv, the group is the largest concrete producer with a share of over 50% of the regional market.
The company is owned by the Pylypenko family: the president is Oleksandr Pylypenko, and the CEO is his son, Serhiy Pylypenko. Other co-owners are Mykola Subotenko and Volodymyr Surup.
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