12th Apr 2016 06:57
LONDON (Alliance News) - Breedon Aggregates Ltd on Tuesday said the UK Competition & Markets Authority has concluded there is a realistic prospect of a substantial lessening of competition in the ready-mixed concrete markets if it is to acquire Hope Contruction Materials Ltd.
The proposed acquisition, which was first announced in November, now faces being referred for an in-depth investigation by the CMA, unless Breedon is able to address the competition concerns.
This comes after the CMA completed a phase 1 review of the merger of the two construction companies, which both produce and supply aggregates and the ready-mixed concrete RMX.
"The vast majority of the merger raises no concerns but there are a number of areas where the companies compete strongly with each other for customers," Sheldon Mills, CMA senior director of mergers and decision-maker in the initial investigation, said.
The CMA said the two are "major competitors in RMX and operate over 100 RMX sites across England, Wales and Scotland".
"The CMA has found that the transaction gives rise to competition concerns in relation to 27 RMX sites, meaning that customers might face higher prices as a result of the merger in the local areas surrounding these sites," the authority said in a statement, but noted there are no competition concerns over both companies' production and supply of aggregates.
Breedon said in a statement on Tuesday the outcome is in line with its expectations and it now has "a short period during which to offer remedies to address the CMA's outstanding concerns".
However, Breedon added it still expects to complete the acquisition later this summer, in line with previous guidance.
By Hannah Boland; [email protected]; @Hannaheboland
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