Sika AG and MBCC Group have asked the CMA to consider a “fast-track” remedy to address concerns that their merger could harm the construction industry in the UK
In November 2021, Swiss firm Sika agreed to buy the German based MBCC Group in a £4.5 billion deal. Sika and MBCC are the 2 largest UK suppliers of chemical admixtures, which are an essential input for products like concrete and cement used in the construction industry and control various characteristics of concrete, such as its strength or setting time.
The companies are widely regarded as the strongest suppliers in the UK market, particularly in relation to their product development and innovation capabilities, and together account for over half of the UK supply.
Following an initial Phase 1 investigation, the CMA identified competition concerns in the supply of chemical admixtures in the UK. As a result, the CMA referred the deal for an in-depth Phase 2 investigation in August 2022.
Early in the Phase 2 investigation, the 2 businesses conceded that the deal raises competition concerns and asked the CMA to “fast-track” the case to the assessment of a remedy that could address those concerns.
The CMA accepted the businesses’ request and has provisionally found that the deal could reduce competition. Without remedies to restore this loss of competition, the deal could reduce the level of innovation, services and quality available to concrete producers, as well as leading to higher prices.
To address this, the merging businesses 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 currently consulting on the remedies that have been proposed.
Richard Feasey, Independent CMA Panel Chair, said:
The CMA is asking for views on the remedy offered by 4 November 2022 and on its provisional findings by 15 November 2022. The statutory deadline for the CMA’s final report is 24 January 2023.
For more information, visit the Sika AG / MBCC Group merger inquiry page.
Notes to Editors