Heidelberg Materials' proposed purchase could curb competition in parts of England

Following a phase 1 Investigation, the Competition and Markets Authority (CMA) has provisionally found that the proposed purchase of Mick George Ltd by Heidelberg Materials UK (formerly Hanson) raises competition concerns in certain markets for building materials in the east of England and the East Midlands.

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 18 local markets. In each of these 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.’

Heidelberg Materials and Mick George now have five working days (until 1 December) 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.