CMA finds concerns in proposed chemicals merger

The Competition and Markets Authority (CMA) has found that the anticipated purchase of MBCC Group by Sika AG could lead to a loss of competition in the supply of chemical admixtures in the UK.

Chemical admixtures are an essential input for products like concrete and cement used in the construction industry. These specialty chemicals are commonly used to improve the strength of concrete or to control its setting time, to allow wet concrete to be transported over longer distances or held on-site for longer periods.

Chemical admixtures, which have become increasingly important as construction methods have developed, also play a key role in reducing the cost and environmental impact of concrete production.

Sika AG is a Swiss-based multinational specialty chemical company active across the construction sector and motor vehicle industry. MBCC is also a leading global supplier of construction chemicals and solutions.

Sika announced its intention to acquire MBCC, in a deal valued at around £4.5 billion, in November 2021.

Sika and MBCC are the two largest suppliers of chemical admixtures in the UK and compete closely, particularly for customers with large volume requirements . Both companies are also two of the few competitors able to support customer requirements for product development and innovation.

The CMA found that the combined business would account for over half of admixtures supplied in the UK after the merger and face limited competition, giving customers less choice and potentially leaving them facing higher costs and reduced innovation .

Colin Raftery , Senior Director of Mergers at the CMA, said:

“Chemical admixtures are vital to the UK construction industry, used in projects that range from laying pavements to the very largest infrastructure projects.

“The loss of competition that this deal could bring about could lead to higher prices and poorer quality products for customers, increasing the costs of these projects.”

Sika AG and MBCC Group now have to submit proposals to address the CMA’s concerns. If suitable proposals are not submitted, the deal will be referred for an in-depth Phase 2 investigation.

NEWS CATEGORIES

LATEST NEWS

South West Water Chief Executive elected as new President of the Institute of Water

The Chief Executive of South West Water, Susan Davy, has been elected as the new President of the Institute of Water. Susan has championed multiple...

Anglian Water announces partners to complete smart meter roll out

Anglian Water has signed new contracts this week with its network partners Arqiva and alliance partners Kier and Clancy. The new agreements extend the...

De Nora to launch line of optimized SORB FX vessels for PFAS removal

De Nora, an Italian multinational company listed on the Euronext Milan, specialized in sustainable electrochemical technologies and in the emerging green hydrogen industry, is...

£17.5 million water improvement scheme underway at Ballinrees Water Treatment Works, Coleraine

NI Water has announced that a £17.5 million project is underway to extend the existing site at Ballinrees Water Treatment Works, Coleraine. This upgrade will...