Takeover mitigation agreed by watchdog

THE government’s mergers watchdog has accepted mitigation being offered to help ensure a £178 million aggregates company buy-out will not dilute competition.

The Competition and Markets Authority (CMA) was looking into Breedon Group’s plans to buy a big part of the Cemex UK group.

Breedon has said it will sell off some parts of the business to Tillicoultry Quarries, in Scotland, to ensure it is not monopolising the marketplace.

The CMA has now said it is happy with the action being taken by Breedon to ensure it would mitigate the overall impact.

In the summer, Breedon agreed a deal to acquire 100 “quality assets” from Rugby-based Cemex UK, underpinned by approximately 170 million tonnes of mineral reserves and resources.

Following the acquisition, Breedon would have more than 1 billion tonnes of mineral reserves and resources.

Because of the CMA concerns, the newly acquired business had to be ring-fenced and led by an independent management team – pending the watchdog’s approval – operating from its own offices under the name Pinnacle Construction Materials.

The acquisition covers locations across Scotland, Wales, North-East England, Norfolk, the East Midlands, and Yorkshire.

Together, in the year to 2018, these had revenues totalling £178 million.

It operates in areas including aggregates, asphalt, ready-mixed concrete, concrete products and cement, together with contracting services, and has 650 staff.

Breedon, which is based near East Midlands Airport, has previously said the acquisition was consistent with a strategy of acquiring businesses with “strong potential for performance improvements and synergy benefits”.

In its preliminary investigation, the CMA said the deal raised competition concerns in relation to the supply of ready-mixed concrete, non-specialist aggregates and asphalt in 15 local markets.

Breedon said it “notes the announcement by the Competition and Markets Authority that it has accepted Breedon’s undertakings”.

It said: “We now expect the disposal of certain assets to Tillicoultry Quarries Limited to complete shortly.”