The Competition and Markets Authority (CMA) has published the reasons it decided to clear the acquisition by Alumasc Group of ARP Group and Rainwater Online Holdings.
Last year, prior to approving the deal in December, the watchdog had been considering whether the merger could have resulted in a “substantial lessening of competition” (SLC) within UK markets.
Stock Market listed building products supplier Alumasc agreed to acquire ARP Group, its subsidiary Aluminium Roofline Products and Rainwater Online Holdings in July 2023 for £10 million cash.
At the time the acquisition was conditional on approval from the CMA.
Following an investigation, however, the watchdog found the new company would face “a range of constraints”, particularly from other suppliers in the market, like Guttercrest in Oswestry and Dales Fabrications in Ilkeston, minimising the “realistic prospect of an SLC” post-merger, thus clearing the way for the proposed acquisition.
“Overall, while the evidence received by the CMA indicates that the parties compete in the manufacture and supply of metal architectural products, it also shows that the merged entity will continue to face a range of constraints,” the decision notice reads.
“These include strong constraints from Guttercrest and Dales Fabrications as well constraints from a number of other metal suppliers, which, taken together, are sufficient to constrain the merged entity post-merger.”
Adding: “For the reasons set out above, the CMA believes that the merger does not give rise to a realistic prospect of an SLC as a result of horizontal unilateral effects in the manufacture and supply of metal architectural products in the UK.”
Alumasc turned over £89.4 million in FY2022, compared to £77.8 million the previous year.
Leicester-headquartered ARP is understood to employ around 70 people.
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