The U.K. competition regulator said Wednesday that the expected acquisition of MBCC Group by Sika AG could lead to a loss of competition in U.K. chemical admixtures supply, and asked for a proposal to address concerns.
The Competition and Markets Authority said Sika and MBCC are the two largest suppliers of chemical admixtures in the U.K.–vital for products like concrete and cement–and closely compete, particularly for customers with large volume requirements. Furthermore, they are one of the few competitors able to support client requirements for development and innovations.
The CMA said that the combined business would account for more than half of admixtures supplied in the U.K. after the merger and face limited competition, giving customers less choice and potentially leaving them facing higher costs and reduced innovation.
Sika and MBCC now have five working days to address the concerns, and if suitable proposals aren’t submitted, the transaction will be referred for an in-depth Phase 2 investigation.
Swiss chemicals company Sika said on Nov. 11 that it would acquire German-based MBCC Group from an affiliate of Lone Star Funds LLC, in a transaction with an enterprise value of 5.5 billion Swiss francs ($5.71 billion).
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