
Displaying items by tag: Competition and Markets Authority
Competition and Markets Authority (CMA) approves Breedon Group’s divestments as part of Cemex deal
01 December 2020UK: The Competition and Markets Authority (CMA) has accepted Breedon Group’s proposed divestments as part of its acquisition of certain assets from Cemex subsidiary Cemex Investments. The agreement will see the divestment of 14 sites - including a cement terminal, two quarries and 10 ready-mix plants - to Tillicoultry Quarries.
The building materials producer said that it “notes the announcement today by the CMA that it has accepted Breedon's undertakings in lieu of a reference to a Phase 2 investigation in respect of its acquisition of certain assets from Cemex Investments Limited.”
Competition and Markets Authority contacts Hanson UK over potential market data breach
27 November 2020UK: The Competition and Markets Authority (CMA) has written to HeidelbergCement subsidiary Hanson UK to express concern and set out actions to prevent a recurrence of a breach of a market data order for “data disclosed which could have been a proxy for Individual Cement Market Data.” The CMA says that on 11 September 2020 Hanson made a payment in error to the Mineral Products Association (MPA) which involved three pieces of information: the payment; relating to MPA subscription fees, remittance advice relating to the payment; and an invoice following the MPA’s querying of the payment. In the view of the CMA each piece of information breached the Cement Market Data Order, because it contained ascertainable cement volume data information.
Hanson has explained that the breach arose due to administrative error.
UK: Breedon Group says that it has agreed to sell 14 sites to Tillicoultry Quarries for Euro13.5m. The sale includes a cement terminal and two quarries in Scotland, and 10 ready-mix plants and an asphalt plant in England. Breedon says it is making the divestment in order to meet the concerns of the Competition and Markets Authority (CMA) with regard to its takeover of part of Cemex UK’s ready-mix and aggregates operations. Once completed the group expects to be able to finalise its integration of the remaining assets acquired from Cemex into its existing business.
Chief executive officer (CEO) Pat Ward said, "We are very pleased with the outcome of this process and believe it is in the interests all stakeholders. It allows Breedon to realise fair value for the assets disposed of, which, together with the people employed in them, will be in good hands under new ownership by Tillicoultry Quarries."
Competition and Markets Authority to consider Breedon Group undertakings for Cemex UK acquisitions
14 September 2020UK: The Competition and Markets Authority (CMA) has announced that it will consider the undertakings offered by Breedon Group to which its deal with Cemex UK for acquisition of several of the latter’s ready-mix and aggregates operations would be subject. The regulator explained its ruling by saying, “There are reasonable grounds for believing that the undertakings might be accepted by the CMA under the Enterprise Act 2002.” This may lead to the completion of the acquisitions, which were agreed on 21 January 2020.
UK: The Competition and Markets Authority (CMA) has said that Breedon Group’s acquisition of a minority of Cemex UK’s ready-mix and aggregates operations “may lead to a substantial lessening of competition in the supply of ready-mixed concrete, non-specialist aggregates or asphalt in 15 local markets across the UK” in a letter to the group. The Herald newspaper has reported that the potentially affected markets are in localities where Breedon Group is already dominant, such as eastern Scotland and the East Midlands.
CMA senior director Colin Rafferty said, “As consumers source the majority of these materials locally, it’s vital to ensure that enough competition will remain at the local level so there’s enough choice and prices remain fair.” If it fails to respond to the CMA’s concerns by 2 September 2020, Breedon Group will face an in-depth Phase 2 investigation into the deal.
Breedon Group completes acquisition of assets from Cemex
03 August 2020UK: Breedon Group says it has completed the acquisition of selected assets from Cemex. Following instructions from the Competition and Markets Authority (CMA) the assets will be operated as Pinnacle Construction Materials, a newly-created separate business led by its own management team and operating from its own offices. Pinnacle will offer a range of heavy building materials, including aggregates, asphalt, ready-mixed concrete, concrete products and cement, together with contracting services, from approximately 100 locations in England, Wales and Scotland.
The CMA is still investigating the acquisition and plans to announce its initial conclusions in late August 2020. Breedon Group expects to integrate Pinnacle into its UK business at a later date once this process is fully completed. Cemex agreed to sell Breedon Group some of its UK assets in January 2020. This included 49 ready-mix plants, 28 aggregate quarries and a cement terminal for Euro211m.
Breedon goes international
18 April 2018The rumours were confirmed yesterday when the UK’s Breedon Group announced its acquisition of Ireland’s Lagan Cement. The price was Euro527m, which Breedon will finance with a combination of a new loan, extended credit and an equity placing. The assets it will gain include a cement plant in Kinnegad, nine active quarries, 13 asphalt plants and nine ready-mixed concrete plants.
Breedon said that its strategy is to continue buying businesses in the heavyside construction materials market. At a stroke, once the deal completes on 20 April 2018, it becomes an international company. From the cement perspective it gains a new 0.7Mt/yr plant in central Ireland and a terminal in Belfast, UK. The UK Competition and Markets Authority (CMA) wasn’t mentioned in Breedon’s press release on the purchase but it seems unlikely that the competition body would have much to say on the transaction. Lagan Cement does hold ready-mix concrete (RMX) plants, aggregate and asphalt assets in Northern Ireland but these are far away from Breedon’s operations in mainland Britain. That said, the CMA did force Breedon to sell 14 RMX sites when it bought Hope Construction Materials in 2016. Generally speaking, Breedon’s enlargement reduces the diversity of the UK cement industry on the smaller end leaving only Quinn Cement, with operations on both sides of the border, as the country’s sole remaining single site clinker producer.
Aside from geographical expansion, becoming an international building materials company may offer Breedon Group some security from the UK’s exit from the European Union (EU) (so called Brexit). Breedon will join CRH as the only two cement producers with production facilities in both the UK and Ireland. The strategic significance of the position Breedon and CRH are in geographically may arise from whatever deal is reached between the EU and the UK and the significance of the UK’s only land border with the EU. LafargeHolcim is nearly in this club with its plants in England and Northern Ireland and plenty of the other local producers straddle the UK-EU border with terminals or production facilities elsewhere. Yet, in an uncertain Brexit negotiation, having kilns on both sides of the line might come in handy once (or if) the politicians make a decision.
Although, if Liam McCaffrey, the chief executive officer of Quinn Industrial Holding, is to be believed, then Brexit will have little impact at all other than (low) tariffs in a worst case scenario. He said to local press that although damage to the construction industry might arise in the UK from a prolonged recession, the UK’s housing shortage and reliance on imported building materials would probably see it through. That point about a possible financial downturn is important to Breedon Group, given the new debt it will be taking on to pay for acquisition. This is something that will be familiar to Breedon’s competitor Cemex. It is still paying off the debts from its acquisition of Rinker in 2007.
Breedon has decided to delay the release of its interim results from mid-July to September 2018 to allow time for the integration of Lagan into the group. Its sales and earnings may dwarf those from 2017 that it described as ‘one of the most productive years’ in its history. In the meantime congratulations are in order for Breedon Group for ensuring that the UK cement sector is never dull.
UK: The Competition and Markets Authority (CMA) has approved the acquisition by Breedon Aggregates of Hope Construction Materials subject to a sale of selected assets. Breedon has offered to sell 14 ready-mix concrete sites to Tarmac and the Concrete Company, which has been accepted by the CMA. As indicated in Breedon’s announcement on 21 July 2016, it now expects to complete the acquisition of Hope on 1 August 2016.
“The way is now clear for Hope to join us and create the UK’s largest independent construction materials group. It will give us a stronger platform for growth, with a broader geographical footprint, increased scale, an improved product mix, greater financial capacity and a team of highly talented people,” said Breedon’s Chairman, Peter Tom.
With the acquisition of Hope, Breedon Group, as the company will be named from 1 August 2016, Breedon will become the UK’s largest independent construction materials group, with the country’s largest cement plant, around 60 quarries, nearly 30 asphalt plants, approaching 200 ready-mixed concrete plants, some 2100 employees and approximately 750Mt of mineral reserves and resources. The enlarged group’s strategy will be to continue growing organically and through consolidation of the UK heavyside building materials sector.
Competition and Markets Authority refers Breedon Aggregates purchase of Hope Construction Materials for further investigation
12 April 2016UK: The Competition and Markets Authority (CMA) has referred the proposed acquisition of Hope Construction Materials by Breedon Aggregates for further investigation unless Breedon can take action to address competition concerns. An initial study by the CMA found that competition issues might arise in 27 ready-mixed concrete sites, causing potential price rises for end consumers. The study ruled out any competition issues with regards to the companies’ aggregates and cement markets.
“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,” said Sheldon Mills, CMA Senior Director of Mergers. Unless Breedon takes action an in-depth phase two investigation will be conducted by the CMA.
Breedon responded that the CMA’s response was expected. Subject to agreement with the CMA on appropriate remedies, Breedon expects to complete the acquisition later in 2016. Breedon announced in November 2015 that is was planning to buy Hope Construction Materials for Euro480m.
UK Competition and Markets Authority publishes final cement price announcement order
28 January 2016UK: The Competition and Markets Authority (CMA) has published a final order affecting the suppliers of cement and cementitious products in Great Britain (GB). The order sets out these suppliers will be prohibited from sending generic price announcement letters to their customers. Instead, any price announcement letter will have to be specific and relevant to the customer receiving it, including setting out the last unit price paid, the new unit price and specific details of other charges that apply to the customer. The order is effective from 23 January 2016.
The order results from the Competition Commissions (CC) investigation into the supply or acquisition of aggregates, cement and ready-mix concrete in GB, which required Lafarge Tarmac to sell one of its cement plants and Hanson to sell one of its ground granulated blast furnace slag (GGBS) plants to enhance competition in the cement and GGBS markets. The CC also said that it would implement two further remedy measures aimed at reducing transparency in the GB cement markets, comprising a prohibition on generic cement price announcements and restrictions on the disclosure and publication of market data.