Competition Commission tells Tarmac and Lafarge to divest before merging
Published: 03 May, 2012
LONDON: The Competition Commission has told Anglo American, which owns Tarmac, and France's Lafarge that they must pave the way for a new competitor into the UK cement market before a proposed merger of their UK operations can go ahead.
To address the competition concerns, they must sell one of the UK's largest cement plants - Lafarge's Hope facility in Derbyshire - as well as more than half the joint venture's ready-mix concrete capacity. It is expected that the Hope plant and supporting operations such as a nearby quarry and three linked rail depots will go to a single buyer.
Roger Witcomb, who is leading the merger inquiry for the Competition Commission, said: "A large-scale disposal like this is the only way to get a new entrant of sufficient scale to break into the UK cement market and thereby ensure that this joint venture does not damage competition."
He said there were only four UK producers of bulk cement and there was evidence that competition has not been as effective as it could be. The inquiry has also highlighted fears over the impact on the markets for rail ballast and the supply of high purity limestone, which is used in reducing emissions from coal-fired power stations.
Lafarge and Anglo American said they were confident the conditions proposed by the Commission will be met. Six aggregate quarries, including one near Buxton, and two asphalt plants are also part of the package of operations due to be sold off under the Commission proposals.