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Tarmac and Lafarge merger given green light - provided they sell plants

The Competition Commission (CC) has ruled that Tarmac owner Anglo American and Lafarge must sell a significant portfolio of their operations, paving the way for entry by a new competitor into the UK cement market, before their proposed construction materials joint venture can go ahead.

The ruling follows and a provisional ruling in February, when the CC found that the joint venture between Anglo American and Lafarge could damage competition in certain markets for construction materials. In its final report published today, the CC has reiterated its tconcern that the joint venture would increase the danger of coordination in the market for bulk cement and would reduce competition in local and national markets for other products including aggregates, asphalt and ready-mix concrete.

To address these concerns, Anglo American and Lafarge will now be required to sell an extensive package of operations including:

  •    a cement plant in Hope, Derbyshire as well as the nearby Dowlow quarry and three linked rail depots
  •    a substantial network of ready mix concrete plants, representing well over half of the proposed joint venture’s ready mix capacity
  •    six aggregate quarries as well as Tarmac’s share of two quarries owned through its Midlands Quarry Products (MQP) joint venture with Hanson—and one rail depot
  •    two asphalt plants as well as Tarmac’s share of five plants owned through MQP

It is envisaged that the Hope plant and supporting operations including the Dowlow quarry and a substantial network of ready mix plants will go to a single buyer. This sale will have to be completed before the joint venture can go ahead.

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