The CMA has accepted a remedy from Sika and MBCC preventing their
global merger from harming the UK construction industry.
Early in the Phase 2 investigation, the 2 businesses accepted
that Sika’s anticipated purchase of MBCC raised competition
concerns in the supply of chemical admixtures in the UK. The
parties asked the Competition and Markets Authority (CMA) to
“fast-track” the case to the assessment of a remedy that could
address those concerns, meaning that the case could be resolved
more quickly. As a result, the CMA has today published its final
decision, with a detailed assessment of a complex remedy, well
ahead of the deadline of 24 January 2023.
The merging businesses proposed to sell MBCC’s chemical
admixtures business in the UK, across Europe and several other
countries, including its central research and development assets.
The CMA assessed whether the parties’ proposed remedy would fully
restore the competition that would be lost as a result of the
merger. Following a detailed review of the remedy, and
consultation with stakeholders and various modifications proposed
by Sika and MBCC, the CMA has accepted that the proposed sale
would resolve the competition concerns it identified, bringing
the case to a close.
The CMA has engaged closely and constructively with other
agencies reviewing this transaction throughout its investigation,
including regarding the effectiveness of the proposed remedy.
Richard Feasey, Independent CMA Panel Chair, said:
After Sika and MBCC accepted early on that the deal would have
caused competition concerns in the UK construction industry, we
were able to focus our inquiry on their proposals to address our
concerns. The proposals agreed today will maintain the level of
innovation, services and quality in chemical admixtures available
to concrete producers and help prevent this deal raising prices
for the construction industry in the UK.
We are pleased that by working collaboratively with the companies
and other competition authorities, we have been able to reach
this decision on a complex global remedy so quickly. The CMA will
keep looking for ways to make merger control focused, fast and
efficient.
In November 2021, Swiss firm Sika agreed to buy the German based
MBCC Group in a £4.5 billion deal. Sika and MBCC are the 2
largest UK suppliers of chemical admixtures, which are an
essential input for products like concrete and cement used in the
construction industry and control various characteristics of
concrete, such as its strength or setting time.
The companies are widely regarded as the strongest suppliers in
the UK market, particularly in relation to their product
development and innovation capabilities, and together account for
over half of the UK supply.
Following an initial Phase 1 investigation, the CMA identified
competition concerns in the supply of chemical admixtures in the
UK. As a result, the CMA referred the deal for an in-depth Phase
2 investigation in August 2022.
For more information, visit the Sika AG / MBCC Group
merger inquiry page.
Notes to editors
-
The parties propose to sell MBCC’s Admixtures Systems
division including MBCC’s chemical admixture businesses in
the UK, the EEA, Switzerland, the United States, Canada, and
the whole of MBCC’s businesses in Australia and New Zealand
to a single purchaser. The CMA will need to approve the
purchaser before the sale is finalised.
-
The process that applies where merging parties request to
concede an SLC is set out in paragraphs 7.18 to 7.21 of
CMA2
revised.
-
In addition to conceding that the deal raises competition
concerns in relation to the SLC identified at Phase 1, the
firms agreed to waive their right to challenge this position
during the CMA’s Phase 2 investigation and submitted a
proposed remedy to address the concerns identified.
-
The CMA also accepted a fast-track remedy during a Phase 2
investigation in relation to the
merger between Carpenter and Recticel.
