Following a phase 1 Investigation, the Competition and Markets Authority (CMA) has provisionally found that the proposed purchase of Mick George Limited (MGL) by Hanson Quarry Products Europe Limited (Hanson) raises competition concerns in certain markets for building materials in East of England and the East Midlands.
Hanson, which is wholly owned by Heidelberg, a multinational building materials company, is one of the UK's leading producers and distributors of construction materials, with production facilities and customers throughout the UK. MGL is one of the leading suppliers to the construction industry in the East of England and East Midlands.
Both Hanson and MGL supply aggregates, which are widely used in the construction of roads, buildings, and other infrastructure in the UK. The two businesses also supply ready-mixed concrete - manufactured by mixing aggregates with specific quantities of cement and other additives - which is also an important material used in the construction sector.
After investigating the deal, the CMA found it gives rise to competition concerns in relation to the supply of non-specialist aggregates or ready-mix concrete in eighteen local markets in the East of England and the East Midlands.
In each of these local markets, the two businesses currently have a large, combined presence, with limited competition from other suppliers. The CMA is therefore concerned that the deal could result in limited choice for local customers, leading to higher prices and lower quality products for contractors working in these areas.
Colin Raftery, CMA Senior Director for Mergers said:
"These products are an important input for building projects, so a loss of competition between two of the main suppliers could result in increased construction costs for businesses and public bodies.
"In many areas where both businesses are active, sufficient competition will remain. But in some local markets, where there are not enough strong alternatives to the merging business, the deal could limit customer choice.
"Unless the companies put forward a solution, we will need to take a deeper look into the potential impact of reduced competition in these local areas."
Hanson and MGL now have five working days to address the CMA's concerns. If they are unable to do so, the merger will be referred for an in-depth phase 2 investigation.
F
