Watchdog concerns over Breedon deal

A £178 million plan to mix cement companies could fail over concerns of price “alignment” in the East of Scotland.

The Competition and Markets Authority (CMA) yesterday said it planned to dig deeper into competition concerns at plans by building materials giant Breedon to acquire sites owned by Cemex.

Breedon announced in January it had agreed a deal to buy approximately 100 Cemex sites, including aggregates quarries, ready-mixed concrete facilities, asphalt plants and a cement terminal, across the UK.

Following its initial phase 1 investigation, the CMA said it was concerned the deal could lessen competition and lead to higher prices and lower quality building materials.

The CMA identified 15 local markets where the two businesses currently have a large presence and compete closely, with limited competition from other suppliers.

It found 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 said this could result in cement suppliers competing less strongly for certain customers in the region.

CMA senior director Colin Raftery 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.”

Breedon said it had completed the acquisition on July 31 and the CMA ruling was in line with expectations.

The integration would take “several months to implement, during which time former Cemex assets will continue to be held separate from Breedon.”

One of Breedon’s cement-mixer lorries.