The proposed takeover by Hanson UK of construction and demolition waste recycler Mick George Group could result in “less choice and higher prices” for construction materials.
An investigation by the Competition and Markets Authority (CMA) found the proposed merger raises “competition concerns in certain markets” in the East of England and East Midlands, where Mick George is one of the leading suppliers of aggregates and ready-mixed concrete.
Building materials giant Hanson announced the proposed acquisition in December 2022, subject to competition authority approval.
At the time it said the merger would bolster its circular materials capacity and complement the firm’s existing aggregates and ready-mixed concrete arm.
However, the CMA found the deal gives rise to competition concerns in relation to the supply of non-specialist aggregates or ready-mix concrete in eighteen local markets where the two businesses have a large, combined presence and “limited competition” from other suppliers.
It said the deal could result in limited choice for local customers, leading to higher prices and lower quality products for contractors working in these areas.
Both companies now have five working days to respond.
If they are unable to address the CMA’s concerns, the merger will be referred for a further investigation.
“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,” said Colin Raftery, CMA senior director for mergers.
“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.”
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