The Fair Trade Commission gave conditional approvals April 23 to two merger plans that would create the nation’s largest and second-largest cement firms by the end of this year.
Chichibu Onoda Cement Corp. and Nihon Cement Co. would merge to become the nation’s top cement firm, while Mitsubishi Materials Corp. and Ube Industries would integrate their cement divisions to create the second largest.
In response to the FTC’s concerns about a possible oligopolistic situation emerging, Chichibu and Nihon said they would either dispose of or give away 40 of their distribution stations to other companies, rent out a large-scale seaside facility for use by importers and take a number of other measures.
Likewise, Mitsubishi and Ube would respectively take certain self-restraint measures to limit their business with the newly created company.
As a result, the FTC decided that it will approve the two mergers on condition that the firms fulfill such pledges.
According to their initial plans, Chichibu and Nihon Cement Co. would have held 39.3 percent of Japan’s total cement market, while the cement affiliate of Mitsubishi and Ube would control 24.3 percent, creating a situation in which the nation’s top three firms would occupy more than 80 percent of the domestic market.
Pointing to the negligible volume of imported cement — less than 1 percent — and the lack of competition in the Japanese market, the FTC demanded that changes be made to the initial plans.
The Ministry of International Trade and Industry welcomed the FTC’s conditional approvals, and said the planned moves would help ensure a steady supply of low-cost cement in Japan through improved efficiency in production and distribution systems.
The ministry also said it expects the companies to transfer their technology to Asia through their overseas operations, which would thereby help economic development in neighboring Asian nations.
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