Breedon Aggregates said yesterday it would move quickly to sell Scottish assets following a final agreement with UK competition authorities.
But it also took a swipe at the process of reviewing acquisitions after competition concerns are raised, saying the current system was cumbersome and in need of significant streamlining.
Announcing a big rise in profits, Derby-based Breedon said it was close to agreeing remedies with the Competition Commission (CC) after concerns were raised about its acquisition of assets from Aggregate Industries UK last April.
Breedon took over 11 aggregate quarries, four asphalt plants, nine ready-mix concrete sites and two concrete-block factories located at 18 sites in Grampian, Tayside, Highland and the Hebrides in a £34million deal.
The Office of Fair Trading (OFT) and the CC both warned that some of Breedon’s Scottish customers could face higher prices unless action was taken to address the competition concerns.
In its results statement yesterday, Breedon said the overall impact of the anticipated remedies was “not significant” to the value of the acquisition.
Chief executive Simon Vivian added: “We will seek to expedite any sale process of the assets concerned in order to minimise disruption and secure the future of the small number of employees affected.
“Following agreement of final remedies, we will be free to pursue the full integration of the remaining operations with our existing business in Scotland, and expect to deliver appreciable synergy benefits.”
Mr Vivian said the competition review took nearly a year and involved substantial management time and costs.
He added: “This was exacerbated by the significant duplication of effort involved in providing much the same information to the CC as we had already provided to the OFT.
“Whilst we appreciate the need for the authorities to look carefully at regional and local competition issues, we cannot help feeling that the process is unnecessarily cumbersome, particularly for smaller, acquisitive companies like ours.
“It is to be hoped that the forthcoming combination of the OFT and CC into the new Competition and Markets Authority will lead to a significant streamlining of the review process.”
The CC’s proposed remedies to address “anti-competitive effects” of the merger include a recommendation for Breedon to sell asphalt and ready-mix concrete operations in areas where competition has been reduced.
Ready-mix operations in the Peterhead/Stirlinghill area of Aberdeenshire and asphalt sites near Aberdeen, such as Craigenlow, at Dunecht, or Tom’s Forest, at Kintore, have been recommended for one or more disposals.
The CC has also suggested Breedon could sell one or more asphalt operations near Inverness.
Breedon’s underlying pre-tax profits for 2013 came in at £12.4million, up from £5.6million.