Breedon welcomes CMA announcement
Competition Authority says divestment undertakings offered by the company might be acceptable
BREEDON Aggregates have welcomed today’s announcement by the Competition and Markets Authority (CMA) that it has reasonable grounds for believing that the undertakings offered by Breedon in connection with its proposed £336 million acquisition of Hope Construction Materials, or a modified version of them, might be acceptable.
Earlier this month the CMA announced that Breedon’s anticipated acquisition of Hope could give rise to competition concerns in relation to 27 ready-mixed concrete sites, but that the company could avoid the acquisition being referred for an in-depth phase 2 merger investigation – if it offered an acceptable solution to address the competition concerns in those local areas where the sites are located.
As a result, Breedon have proposed undertakings to the CMA to divest 14 ready-mixed concrete plants currently owned by both themselves and Hope to an up-front buyer approved by the CMA.
The Authority will now consider in detail whether to accept the undertakings offered by Breedon instead of carrying out the in-depth merger investigation, although today it announced that there are reasonable grounds for believing that the undertakings, or a modified version of them, might be acceptable.
The CMA now has until 23 June 2016 to decide whether to accept the undertakings, although it may decide to extend this deadline to 25 August 2016 if it considers there are special reasons for doing so. As part of this consideration process, the Authority will undertake a public consultation on whether the proposed undertakings are sufficient to address the competition concerns.
If the undertakings are not accepted, the acquisition will be referred for a phase 2 merger investigation.
In a statement issued today, Breedon Aggregates say they fully expect to be able to finalize the required undertakings to the CMA’s satisfaction and complete the required divestments in the near future, paving the way for completion of the acquisition of Hope later this summer.