Quarries, asphalt plants and concrete-making sites in Scotland face an uncertain future after a decision to refer a £34million industry takeover to the UK’s competition watchdog.
The Office of Fair Trading (OFT) said yesterday it wanted the Competition Commission (CC) to investigate the recent acquisition of certain assets of Aggregate Industries by Breedon Aggregates.
According to the OFT, the deal raises the prospect of a “substantial lessening of competition in areas in north Scotland”.
Derby-based Breedon announced the acquisition – affecting 12 Scottish sites – in April.
More than 150 workers north of the border found themselves with a new employer as Breedon snapped up quarries, asphalt plants, ready-mixed concrete facilities and concrete block-makers in Grampian, Tayside and the Highlands and islands.
Breedon, which describes itself as the largest independent aggregates group in the UK, already had 28 Scottish sites employing about 400 people.
The company’s chief executive in Scotland, Alan Mackenzie, said the deal was a positive story for the former employees of Aggregate Industries.
Yesterday, Breedon said it had carried out an “extensive examination” of the market and it strongly believed there were only minor issues in one product area which may require disposal of a limited number of individual assets.
It added: “Breedon believes that its view is consistent with the findings of the CC in their recent market review and the criteria applied to the Anglo American/Lafarge merger in 2012.” The CC is already lining up a wide range of measures to break open the UK cement market after provisionally finding that both structure and conduct in the sector limit competition by aiding co-ordination between certain producers.
In May, it said co-ordination between three firms – Lafarge Tarmac, Cemex and Hanson – was likely to result in higher prices for all cement users.
The CC’s investigation into the Breedon-Aggregate Industries deal is expected to take up to six months. Breedon also said current trading remained strong and was in line with current market expectations.