Photo by: Duane Daws
The Competition Commission said on Tuesday that it had prohibited Raumix Aggregates, a subsidiary of the Raubex Group, from acquiring OMV Kimberley and OMV Kimberley Mining, collectively known as the OMV Group.
Post-merger, Raumix, and ultimately Raubex, would have controlled the OMV Group.
“The proposed transaction would substantially prevent or lessen competition in the market for the production and supply of aggregates used in the surfacing of national roads in the Kimberley area. Other than the OMV Group, there is no other supplier in Kimberley that supplies the road stones required for the surfacing of national roads,” the commission said in a statement.
The commission noted that Raubex would have “the ability and incentive” to raise the costs of downstream competitors, in instances where they would require road stones that meet the specifications of the Committee of Land Transport Officials, as required by the South African National Roads Agency.
The commission considered possible supply remedies proposed by the merging parties, but concluded that the remedies did not adequately address its concerns.
The Raubex Group is active in road construction (including surfacing, rehabilitation and maintenance), the production and supply of value-added bitumen products, the production and supply of aggregates from quarries, contract crushing of aggregates and other raw materials, the production and supply of asphalt, and materials-handling and benefaction for the mining industry.
OMV produces aggregates that are used as road stone by road contractors, as well as in asphalt production and high-quality concrete applications.