4 May 2012
Anglo American/Lafarge construction material JV gets conditional green light from the CC
On 1st May 2012, the UK’s Competition Commission (CC) cleared Anglo American and Lafarge’s £1.8 billion joint venture, accepting commitments offered by the Parties in the previous month. Lafarge and Anglo American, which operates in the UK through its subsidiary Tarmac, are two of the largest suppliers of construction materials in the UK and the joint venture combines the bulk of their UK construction materials businesses, including the production of aggregates, asphalt, cement and ready-mix concrete. This complex transaction, with a number of products at play and significant interaction between their markets, was referred by the UK’s Office of Fair Trading to the CC last September on the basis of potential unilateral effects, coordinated effects and vertical effects. The CC’s investigation was particularly focused on competition in the national market for bulk cement and the extent to which the joint venture could increase the scope for coordination in this market. The remedies offered by the Parties envisage the entry of a new player in cement with considerable scale and were accepted by the CC as sufficient to ensure the joint venture does not damage competition. The CC also considered numerous local aggregate, asphalt and RMX markets and, inter alia, employed econometrics techniques to assist in filtering out local markets where no SLC was likely, ultimately requiring certain divestments to address unilateral effects concerns. RBB advised both Parties, working with Linklaters and Kirkland & Ellis.