Ready mixed concrete merger faces investigation

The merger of two major aggregates suppliers faces investigation by the Competition and Markets Authority.

Breedon Aggregates has struck a deal to take over Hope Construction Materials for £336m. The combination of Breedon and Hope will create the UK’s leading independent producer of cement, concrete and aggregates and a vertically-integrated building materials group.  

The move comes just three years after India steel magnate Lakshmi Mittal invested £272m on setting up Hope by acquiring assets that Lafarge and Tarmac were required to sell for their merger to go ahead. The Mittal family will retain a £134m stake in the combined business.

Both companies - Breedon Aggregates Limited (Breedon) and HopeConstruction Materials Limited (Hope) - produce and supply aggregates and ready-mixed concrete (RMX). 

The two companies are major competitors in RMX and operate over 200 RMXsites across England, Wales and Scotland. The Competition and Markets Authority (CMA) has found that the transaction gives rise to competition concerns in relation to 27 RMX sites, meaning that customers might face higher prices as a result of the merger in the local areas surrounding these sites.

Sheldon Mills, CMA Senior Director of Mergers, and decision-maker in the initial investigation, 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.