All of these materials are widely used in the UK
construction industry as essential components in the
construction of roads, buildings and other
infrastructure.
Following its initial Phase 1 investigation, the
Competition and Markets Authority (CMA) found that the
deal gives rise to competition concerns in relation to
the supply of ready-mixed concrete, non-specialist
aggregates or asphalt in 15 local markets across the UK.
In all of these local markets, the 2 businesses currently
have a large presence and compete closely, with limited
competition from other suppliers.
The CMA has also found that the merger could make it
easier for cement suppliers in the East of Scotland to
align their behaviour, without necessarily entering into
any express agreement or direct communication, in a way
that limits the rivalry between them. The CMA found that
this could result in cement suppliers competing less
strongly for certain customers in the region.
The CMA is therefore concerned that the deal could result
in a substantial lessening of competition, leading to
higher prices and lower quality building materials for UK
construction projects.
Colin Raftery, CMA Senior Director said:
“These products are widely used in a range of building
projects across the UK, and account for a material part
of the construction costs faced by businesses and public
bodies. As the majority of these materials are sourced
locally, it’s vital to ensure that enough competition
will remain at the local level so there’s enough choice
and prices remain fair.
“While sufficient competition will remain in most areas,
we are concerned that the deal could result in high
prices and lower quality products in some areas where
Breedon wouldn’t face sufficient competition.”
Breedon and Cemex must now address the CMA’s concerns
within five working days. If they are unable to do so,
the merger will be referred for an in-depth Phase 2
investigation.
For more information, visit the Breedon Group plc/Cemex
Investments Limited merger inquiry web page.
