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Thu March 04 2021

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Watchdog investigates Breedon cement deal

23 Jan 20 The Competition & Markets Authority (CMA) has ordered construction materials suppliers Breedon and Cemex to suspend their planned asset swap pending a regulatory investigation.

The Breedon-Cemex deal, announced earlier this month, is to be investigated for its potential impact on competition in the marketplace.

The CMA has issued the two companies with an initial enforcement order under section 72(2) of the Enterprise Act 2002, preventing either of them from making significant changes to their current business operations for the time being.

On 8th January Breedon entered into a conditional agreement with Mexican cement giant Cemex to take over substantial UK assets and operations for £178m. Under the plan, Breedon will take over approximately 100 Cemex UK operations across six divisions in Scotland, Wales, northeast England, Norfolk, the East Midlands, and Yorkshire – 49 ready-mix plants, 28 aggregate quarries, four depots, one cement terminal, 14 asphalt plants and four concrete products operations. Parts of Cemex’s Paving Solutions business in the UK are also included in the sale to Breedon. [See our previous report here.]

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The CMA has powers to intervene and order changes if it thinks that the deal gives Breedon so much of the market that customers could suffer.  

Breedon, which has a history of similar acquisitions and deals over the past 10 years, said that the intervention came as no surprise. “The CMA has, as expected, imposed an initial enforcement order governing, among other things, the form and scope of the information that can be shared between Breedon and Cemex prior to completion of the CMA's review, and confirms that the company is actively working with the CMA to ensure full compliance with the order," the company said.

It added: “Breedon continues to anticipate completion of the acquisition in the second quarter of this year.”

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