The Competition & Markets Authority (CMA) said that the coming together of Sika AG and MBCC Group could harm the construction industry in the UK.
Swiss firm Sika and Germany’s MBCC are the two largest suppliers in the UK of chemical admixtures, used with concrete and cement to control strength, setting time and other performance characteristics. Together Sika and MBCC account for more than half of the UK admixtures market.
In November 2021, Sika agreed to buy MBCC Group in a £4.5bn deal.
Following an initial investigation, the CMA identified competition concerns in the supply of chemical admixtures in the UK and referred the deal for an in-depth phase two investigation in August 2022.
The two companies soon conceded that their merger raised competition concerns and have now proposed to sell MBCC’s chemical admixtures business in the UK, Europe and several other countries. The next stage of the CMA’s investigation will focus on assessing whether this will fully replace the loss of competition arising from the merger, and the CMA is now consulting on the remedies that have been proposed.
Richard Feasey, independent CMA panel chair, said: “The firms accept that the merger could reduce competition in the UK chemical admixture market. If it were to go ahead without a remedy, this could lead to higher prices for UK concrete producers and less innovation, lower service levels and poorer quality.
“The next stage of our investigation is focused on making sure that any remedy properly addresses these concerns to avoid any adverse impact for UK businesses and consumers.”
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