Breedon moves closer to site sell-off and Hope acquisition

breedonBreedon Aggregates and the Competition and Markets Authority (CMA) appear to be closing in on an agreement over Breedon’s acquisition of Hope Construction.

The firm has come up with a plan to offload 14 sites, including some in Scotland, to avoid a full investigation by the competition watchdog.

Breedon entered into a conditional agreement with Cortolina Investments to acquire Hope Construction Materials Limited for £336 million in November last year. The resulting business created the UK’s largest independent producer of cement, concrete and aggregates, operating over 200 RMX sites across England, Wales and Scotland.

However, a preliminary investigation by the CMA said that the transaction gives rise to competition concerns in relation to 27 ready-mixed concrete (RMX) sites but it ruled out any competition concerns over the production and supply of aggregates or cement.

Breedon said it anticipated disposing of approximately 12-15 sites following the report and has now released details on its plan to offload 14.

The CMA will now undertake a public consultation to consider whether to accept the undertakings and will report in June.

If the undertakings are not accepted, the acquisition will be referred for a phase 2 merger investigation but the watchdog said “there are reasonable grounds for believing that the undertakings offered by Breedon, or a modified version of them, might be accepted by the CMA”.

Welcoming the CMA statement, Breedon said it “fully expects to be able to finalise the required undertakings to the CMA’s satisfaction and complete the required divestments in the near future, paving the way for completion of the acquisition later this summer”.

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