Key facts
- TCC Group Holdings plans to buy 100% of Ivano Frankivsk Cement and three related businesses.
- The deal is valued at up to 750 million euros ($855 million).
- Ivano Frankivsk Cement holds a 36% market share in Ukraine with a production capacity of 4.3 million metric tons annually.
- The acquisition is one of the largest private sector foreign investments in Ukraine during the war.
- The deal requires regulatory approval in Taiwan and Ukraine.
- Ivano Frankivsk Cement exports to Poland, Romania, Moldova, Slovakia, and Hungary.
Taipei-based TCC Group Holdings has received board approval to acquire Ivano Frankivsk Cement, Ukraine's second-largest cement producer, and three associated businesses in a deal valued at up to 750 million euros ($855 million). The transaction, announced on September 23, is subject to regulatory approvals in both Taiwan and Ukraine. This potential acquisition marks a significant private sector investment in Ukraine amidst the ongoing full-scale war and is poised to be the largest deal in the country's cement sector during wartime.
Ivano Frankivsk Cement, which holds a 36% market share in Ukraine and produces 4.3 million metric tons of cement annually, is crucial for the nation's reconstruction efforts. The company employs around 2,500 people and continues to operate despite a drop in domestic demand from 10.6 million tons pre-war to 6.2-6.5 million tons. It also exports to several European countries, including Poland, Romania, Moldova, Slovakia, and Hungary.
TCC Group stated that the acquisition would expand its presence into Eastern Europe, complementing its existing operations in southern and western Europe, which already contribute 42% of its revenue. The company intends to leverage its experience in low-carbon research and development, particularly relevant given Europe's Carbon Border Adjustment Mechanism (CBAM). Ivano Frankivsk Cement also noted that the sale would facilitate the implementation of modern technology and environmental standards to meet Ukraine's future reconstruction needs.
Concerns have been raised about market concentration following a separate deal where Irish company CRH acquired two plants from Dyckerhoff, a subsidiary of Buzzi, for 100 million euros. This move gave CRH control of five of Ukraine's eight active cement plants, leading to worries that a constricted market could drive up reconstruction costs, which are estimated at $588 billion over the next decade. The Ukrainian cement industry has been severely impacted by Russian aggression, with several plants lost or nationalized.