The CMA has found that the anticipated purchase of MBCC Group by
Sika AG could lead to a loss of competition in the supply of
chemical admixtures in the UK.
Chemical admixtures are an essential input for products like
concrete and cement used in the construction industry. These
specialty chemicals are commonly used to improve the strength of
concrete or to control its setting time, to allow wet concrete to
be transported over longer distances or held on-site for longer
periods.
Chemical admixtures, which have become increasingly important as
construction methods have developed, also play a key role in
reducing the cost and environmental impact of concrete
production.
Sika AG is a Swiss-based multinational specialty chemical company
active across the construction sector and motor vehicle industry.
MBCC is also a leading global supplier of construction chemicals
and solutions. Sika announced its intention to acquire MBCC, in a
deal valued at around £4.5 billion, in November 2021.
Sika and MBCC are the two largest suppliers of chemical
admixtures in the UK and compete closely, particularly for
customers with large volume requirements . Both companies are
also two of the few competitors able to support customer
requirements for product development and innovation. The CMA
found that the combined business would account for over half of
admixtures supplied in the UK after the merger and face limited
competition, giving customers less choice and potentially leaving
them facing higher costs and reduced innovation .
Colin Raftery , Senior Director of Mergers at the CMA, said:
Chemical admixtures are vital to the UK construction industry,
used in projects that range from laying pavements to the very
largest infrastructure projects.
The loss of competition that this deal could bring about could
lead to higher prices and poorer quality products for customers,
increasing the costs of these projects.
Sika AG and MBCC Group now have 5 working days to submit
proposals to address the CMA’s concerns. If suitable proposals
are not submitted, the deal will be referred for an in-depth
Phase 2 investigation.
For more information, visit the Sika AG / MBCC Group
merger inquiry page.
Notes to editors
- For media enquiries, contact the CMA press office on 020 3738
6460 or press@cma.gov.uk.
- As part of its investigation, the CMA also considered whether
there would be an SLC in relation to certain products used in
drinking water infrastructure in the UK, and structural
cementitious grouts used for offshore wind turbine installation.
In both instances however it found that there would be sufficient
competitive constraints to prevent an SLC.
- Under the Enterprise Act 2002 (the Act) the CMA has a duty to
make a reference to Phase 2 if the CMA believes that it is or may
be the case that a relevant merger situation has been created, or
arrangements are in progress or contemplation which, if carried
into effect, will result in the creation of a relevant merger
situation; and the creation of that situation has resulted, or
may be expected to result, in a substantial lessening of
competition within any market or markets in the United Kingdom
for goods or services.
