Jewson acquired Build Center last year but has kept the two businesses separate pending OFT clearance for full merger.
The OFT has concluded that the merger raised no competition concerns nationally because sufficient competitors would remain in the market. However, having taken evidence from 10,000 builders, the OFT concluded that the deal did cause concern in 22 local areas. This was because there were few remaining general builders merchants in these local areas. The OFT was concerned that builders and other tradesmen might see an increase in prices for building materials as a result.
To address these concerns, Jewson has offered to sell at least one branch in each of the 22 affected local areas to restore pre-merger competition levels. The OFT is now consulting on this solution, as it is required to do.
Jewson and Build Center are two of the country's largest general builder's merchants. Build Center has 149 branches across the UK. Jewson has a chain of 510 general builder's merchants in the UK operating under the Jewson and Gibbs & Dandy brands. It also operates some specialist building materials distribution businesses. Jewson is owned by the French materials giant Saint-Gobain.
OFT senior director Ali Nikpay, the decision maker in this case, said: “Whilst we concluded that the merger raised no competition issues on a national basis, we were concerned that builders in some local areas could lose out as a result of reduced competition. We are therefore considering branch sales offered by the parties to resolve these issues.”
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