Saturday, August 15, 2020

CMA launches merger inquiry over Breedon’s CEMEX acquisition

The Competition and Markets Authority (CMA) has launched a merger inquiry into the anticipated acquisition by Breedon Group plc of certain assets of CEMEX.

The news follows CMA’s invitation for comments on the acquisition in June.

The Leicestershire-based construction materials group entered into a conditional agreement with CEMEX in January to acquire certain assets and operations in the UK for £178 million.

The assets being divested by a CEMEX subsidiary consist of 49 active ready-mix concrete plants, 28 active aggregates operations, 4 depots, a cement terminal, 14 asphalt plants and 4 building products plants. Part of the CEMEX Paving Solutions business is included in the sale as well as some inactive sites and they will all be integrated into Breedon’s business.

CEMEX’s UK Assets encompass approximately 100 active operations across six divisions
located in Scotland, Wales, North-East England, Norfolk, the East Midlands, and Yorkshire. In the year ended 31 December 2018, CEMEX’s UK Assets generated revenue of £178 million and EBITDA of £23 million.

As a result of the acquisition, Breedon noted that group mineral reserves and resources will increase by approximately 170 million tonnes, enough to last over 27 years at current extraction rates. The company also expects to achieve annual net pre-tax cost synergies of approximately £2 million by the third full year following completion.

Currently in phase one, the deadline for the CMA to announce its decision whether to refer the Merger for a Phase 2 investigation is 26 August 2020.

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