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Tarmac and Lafarge deal seen as anti-competitive

Building materials giants Tarmac and Lafarge may not be able to merge as planned now that the Competition Commission has provisionally ruled that the proposed joint venture could limit competition in the construction materials market.

Anglo American, Tarmac’s parent company, and Lafarge want to establish a 50:50 joint venture in the UK.

However, the Competition Commission believes that such actions could mean reduced competitiveness in a number of areas.

These are:

  • bulk cement;

  • rail ballast;

  • high purity limestone, when used for flue gas desulphurization

  • primary aggregates for construction applications in 23 local markets;

  • asphalt in two local markets; and

  • readymix in seven local markets.

    Construction Enquirer reports Chairman of the Anglo/Lafarge Inquiry Group, Roger Witcomb, as saying: “We have a number of concerns about this joint venture.

    “In bulk cement there are currently only four UK producers, and there is evidence that the market is not as competitive as it could be.

    “Prices and profit margins haven’t been affected in the way we would have expected following the big falls in the demand for cement in the past few years.

    “We are concerned that the proposed tie-up would increase the susceptibility of this market to coordination.”

  • About Fiona Russell-Horne

    Group Managing Editor across the BMJ portfolio.

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