{"id":16988,"date":"2025-08-22T21:32:13","date_gmt":"2025-08-22T21:32:13","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/16988\/"},"modified":"2025-08-22T21:32:13","modified_gmt":"2025-08-22T21:32:13","slug":"battle-lines-drawn-in-legal-dispute-over-sale-of-cement-maker-in-ukraine-to-crh-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/16988\/","title":{"rendered":"Battle lines drawn in legal dispute over sale of cement maker in Ukraine to CRH \u2013 The Irish Times"},"content":{"rendered":"

Ukrainian<\/a> building materials group Kovalska is readying itself for a final legal battle against a decision by the country\u2019s mergers regulator to allow CRH<\/a> buy a business called Dyckerhoff, owner of two cement plants there. Kovalska maintains that the deal, done last year, leaves CRH as one half of a duopoly in the market for a material Ukraine desperately needs.<\/p>\n

The war-torn country faces a \u20ac506 billion bill to rebuild, estimates suggest. The European Union, its member states and other international donors are expected to help bankroll this. Ukraine will need up to 20 million tonnes of cement a year. However, even at full pre-war capacity it could produce only 11 million tonnes annually.<\/p>\n

Kovalska will go to the supreme court Kyiv in September in a last-ditch effort to overturn last year\u2019s decision by the anti-monopolies committee of Ukraine (AMCU) to allow the Irish giant buy Dyckerhoff for a reported \u20ac100 million. <\/p>\n

\u201cAll we want is normal market competition,\u201d Sergeii Pylypenko, Kovalska\u2019s chief executive, told The Irish Times.<\/p>\n

His company and others in its industry calculate that the Dyckerhoff deal will give CRH 46 per cent of the market with a similar slice in the hands of another producer, Cemin West.<\/p>\n

That share is above the EU\u2019s 40 per cent benchmark for market dominance, and Ukraine\u2019s own measure, which is 35 per cent. Within that, local industry figures say CRH could have up to 99 per cent in some regions of Ukraine.<\/p>\n

It is understood that CRH contests those figures arguing that its market share is below those levels and closer to 30 per cent. The Irish group said this week that the deal was completed in line with accepted international practice, met all legal requirements and had the AMCU\u2019s approval.<\/p>\n

Kovalska is Ukraine\u2019s single biggest consumer of cement, taking about 10 per cent of the country\u2019s production. The group is a family-owned building materials and property development business. Mr Pylypenko and his father Oleksander Pylypenko own 33 per cent each. Shareholders Volodymyr Surup and Mykola Subotenko own the balance.<\/p>\n

The group originally challenged the AMCU\u2019s decision not to allow it participate in the regulator\u2019s review of CRH\u2019s agreement to buy Dyckerhoff from its previous owner, Italy\u2019s Buzzi Unicem, following its announcement in July 2023. However, the courts ruled against Kovalska.<\/p>\n

This prompted it to tackle the ACMU\u2019s decision itself. Kovalska won the first round in February, when the Kyiv commercial court ruled in its favour. However, Ukraine\u2019s court of appeal overturned this. The group decided to go to the supreme court, which will hear all sides\u2019 arguments next month on a date to be set. <\/p>\n

That court\u2019s decision will be final. A ruling against Kovalska ends any legal challenge. However, the consequences for CRH of a finding for the local player are not entirely clear. It is understood that the AMCU will have to go back and review the original Dyckerhoff deal all over again.<\/p>\n

CRH has by now taken legal ownership of the business and its two cement plants, which may be difficult to unwind. The group points out that it has met the conditions that the AMCU set before allowing the transaction.<\/p>\n

Specifically, they included selling 25 per cent of Dyckerhoff to an unrelated third party. CRH did this in June, offloading the stake to a company called Divinereach Ltd with the AMCU\u2019s approval.<\/p>\n

That made some in Ukraine\u2019s construction industry suspicious. Divinereach is Irish. It was registered in March this year with no visible connection to cement manufacturing and looked simply like a shell company.<\/p>\n

Most in Ukraine had understood that the European Bank of Reconstruction and Development (EBRD) would take the Dyckerhoff stake. Media reports named the institution as the likely candidate to buy the shares. <\/p>\n

In July, the Confederation of Builders of Ukraine, of which Sergii Pylypenko is a director, wrote to Simon Harris<\/a>, T\u00e1naiste and Minister for Foreign Affairs, raising concerns about Divinereach.<\/p>\n

The organisation\u2019s president, Lev Partskhaladze, said it knew Irish diplomatic representatives were \u201cinterested in examining this issue\u201d and sought any further information the Government might have on Divinereach and its role in the transaction.<\/p>\n

Asked if Mr Harris, the Department of Foreign Affairs and Trade<\/a> or its officials had intervened, a spokesman answered that the department and its embassies \u201cengage on an ongoing basis with Irish companies overseas in support of their business activities\u201d.<\/p>\n

It subsequently emerged that Hyundai<\/a> Ireland boss Eugene O\u2019Reilly and his family control Divinereach. Mr O\u2019Reilly\u2019s son, also Eugene, is a director, as is his daughter Susan Jones, while Hyundai Ireland\u2019s managing director Stephen Gleeson is company secretary.<\/p>\n

Divinereach bought the Dyckerhoff stake after a competition to find a bidder. While Mr O\u2019Reilly is primarily known for his involvement in the Irish motor trade, he and his family are active investors.<\/p>\n

Their interests include property. In 2020, an O\u2019Reilly company, Ditton Investments, won planning permission for 150 apartments in Deansgrange, Dublin. Another real estate firm, Fitzditton, had assets of \u20ac10 million at the end of 2023.<\/p>\n

Each family member also has their own holding company that takes shares in various enterprises in which the O\u2019Reillys are involved. Mr O\u2019Reilly junior\u2019s is Jreugor, Ms Jones\u2019s is Sumaroal.<\/p>\n

Another daughter, Eva Sutherland, married to Ian, son of the late Peter Sutherland, once chairman of Goldman Sachs and the World Trade Organisation, holds her interests through Epjeaveav. A fourth sibling, Rachel McAree, controls Rachem. Three of those firms each had assets of more than \u20ac19 million at the end of 2023, barring Jreugor, which had \u20ac18.3 million.<\/p>\n

One of the businesses they have backed is Tracematics, owner of Rentalmatics, an Irish firm that develops and sells software to manage fleets of rented vehicles. Mr O\u2019Reilly senior sits on Rentalmatics\u2019 board, alongside another investor, former Europcar boss Colm Menton. That venture has offices here and in New York.<\/p>\n

The O\u2019Reilly family holding companies own shares in Jarole, an overall investment management entity, while the siblings are directors of Lejaro, owner of the Hyundai Ireland business.<\/p>\n

CRH dwarfs all this. The New York-listed Irish group describes itself as the world\u2019s biggest building materials company. It made profits of \u20ac1.12 billion in the three months to June alone. In July, it agreed to buy US green cement maker Eco Material Technologies for \u20ac1.8 billion.<\/p>\n

Most of its profits come from the US, but it has invested \u20ac600 million in Ukraine since 1999, \u20ac80 million since Russia\u2019s invasion and employs 2,000 workers there. The company says it is monitoring an unsuccessful bidder\u2019s challenge to the AMCU\u2019s approval for the Dyckerhoff deal but is focused on continuing to invest in the country.<\/p>\n

Kovalska dismisses that it was an underbidder for Dyckerhoff or has any interest in buying it. According to Mr Pylypenko, the group is considering building its own cement manufacturing plant.<\/p>\n

But he says it does not want Dyckerhoff, whose factories he maintains date back to the Soviet era, are inefficient, consume large amounts of energy and have high greenhouse gas emissions. \u201cWe are not interested,\u201d he said bluntly.<\/p>\n

CRH this week said that it regards Ukraine as strategically important and has continued to invest in its businesses and support its workers there through the war with Russia.<\/p>\n

\u201cOur acquisition of the Volyn and Pivden plants allows CRH to further invest in and help modernise production capability required to meet the long-term market demand for cement, critical infrastructure and housing needs in the country,\u201d said the company.<\/p>\n

The O\u2019Reilly family was contacted for comment. <\/p>\n","protected":false},"excerpt":{"rendered":"Ukrainian building materials group Kovalska is readying itself for a final legal battle against a decision by the…\n","protected":false},"author":2,"featured_media":16989,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[73],"tags":[79,8298,8104,18,8299,19,17,44,2264],"class_list":{"0":"post-16988","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-crh","10":"tag-department-of-foreign-affairs","11":"tag-eire","12":"tag-hyundai","13":"tag-ie","14":"tag-ireland","15":"tag-simon-harris","16":"tag-ukraine-crisis"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/16988","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=16988"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/16988\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/16989"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=16988"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=16988"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=16988"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}