CC says Lafarge - Anglo American merger could threaten competition
The Competition Commission has expressed concerns that a merger between Anglo American and Lafarge could damage competitiveness.
The Competition Commission (CC) has provisionally decided that a merger between Lafarge and Anglo American could potentially damage the marketplace for construction materials.
Chairman of the Anglo/Larfarge inquiry group Roger Witcomb explained there are just four UK producers in the bulk cement market.
Furthermore, profit margins and prices have not been negatively impacted in the way the CC would have anticipated in the face of falling demand in recent years, he added.
"We are concerned that the proposed tie-up would increase the susceptibility of this market to coordination," the representative added.
Merger and acquisition consultants from the firms had proposed establishing a 50-50 joint venture, with Anglo American operating through UK subsidiary Tarmac.
If the combination goes ahead, the firms claimed "substantial recurring synergies" of at least £60 million every year could be created.
Mr Witcomb noted the CC has issued "a notice of possible remedies", which outline ways the anticipated anti-competitive impacts of the joint venture could be minimised.
Posted by David Gleck
Souce: CC press release, February 21st