UK competition watchdog flags Hanson-MGL merger risks

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UK competition watchdog flags Hanson-MGL merger risks
Credit: © Reuters.

LONDON - The UK's Competition and Markets Authority (CMA) has expressed concerns over Hanson Quarry Products Europe's proposed acquisition of Midland Quarry Products (MGL), and a £220m turnover contractor Mick George, which specializes in earthmoving and demolition waste recycling. The CMA cites potential competitive threats in the aggregates, ready-mix concrete markets, and demolition waste recycling across East England and the East Midlands. The CMA's initial investigation warns that the merger could limit competition in these regions, potentially leading to higher construction costs for both private and public sector projects.

The scrutiny comes as Hanson, a HeidelbergCement (ETR: HEIG ) subsidiary, aims to consolidate its position in the UK construction materials market through the takeover of MGL and Mick George. The CMA has identified 18 areas where the merged entity would hold significant market control, raising red flags about reduced choice for local customers and possible price hikes for essential construction materials.

Colin Raftery from the CMA emphasized the importance of maintaining robust competition to prevent negative impacts on regional construction activities. He stressed that without a diverse market, businesses and public organizations could face increased expenses for non-specialist aggregates, concrete supplies, and demolition waste recycling—materials critical for a range of construction projects.

Hanson is now under pressure to propose effective remedies by Nov 29 to address the CMA's concerns. Failure to provide satisfactory solutions could trigger a more thorough phase 2 investigation by the competition authority into the merger's impact on supply dynamics within the construction sector. Hanson's extensive network of facilities and its potential combined strength with MGL and Mick George have put the spotlight on the need for careful consideration of market dynamics to ensure fair pricing and availability of construction materials.

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