Breedon Aggregates appears reconciled to selling about 15 UK concrete plants following a review of its £336million takeover of a rival building materials firm.
The UK’s competition watchdog said yesterday that Breedon’s deal for Hope Construction Materials risked creating a monopoly over ready-mixed concrete supply.
Breedon has until April 19 to suggest ways of addressing the concerns raised by the Competition and Markets Authority (CMA), which has finished a preliminary review it started in February.
If Breedon’s proposals do not pass muster, the CMA will order an in-depth investigation into the acquisition.
The number of concrete plants owned by Breedon will soar from about 60 to more than 200 on the back of the acquisition.
The CMA said it was particularly concerned about the impact of the takeover at 27 sites throughout the UK.
Sheldon Mills, senior director of mergers at CMA, said: “Ready-mixed concrete is an essential product for a wide range of construction projects of all sizes in the public and private sectors.
“The vast majority of the merger raises no concerns but there are a number of areas where the companies compete strongly with each other for customers and the concern is that the loss of such rivalry could lead to price rises for customers.
“The businesses may now resolve these concerns or face a detailed investigation.”
For its part, Breedon said the outcome of the review was “in line” with its expectations that 12 to 15 plants would have to be divested.
Breedon expects the deal for Hope to go through this summer.
Breedon’s Dundee-headquartered Scottish business employs about 700 people and operates 38 quarries, 17 asphalt plants, 36 ready-mixed concrete plants and two concrete block plants.
Hope, which was founded in 2013 following the divestment of assets from Lafarge and Tarmac, has about 12 concrete plants in Scotland, including one near Inverness and another near Elgin.
A number of Breedon’s concrete plants are in those two vicinities, but it is not yet known whether they will be put up for sale.
A spokesman for Breedon said the firm was in talks with the CMA to determine the exact number and location of the plants it will offload.
It is the second time the CMA has intervened after a Breedon takeover in recent times.
In 2014, the Derby-headquartered firm was ordered to sell one of two asphalt plants near Aberdeen following its £34million acquisition of Aggregate Industries UK’s Scottish assets.
Breedon, which is supplying materials for the Aberdeen city bypass and the A9 dualling between Perth and Inverness, eventually opted to offload its plant at Tom’s Forest in Kintore.
But the company is making a quick return to Tom’s Forest and is set to open a new asphalt plant at the site this month.