OFT challenges Tarmac merger

The Office of Fair Trading has challenged a proposed merger of the UK construction businesses of Anglo American's Tarmac and Lafarge, the French cement maker that bought Blue Circle a decade ago.

The OFT has referred the deal to the Competition Commission for further investigation after concluding that several competition concerns arise.

The OFT said there are overlaps in a number of markets on a local, regional and national level in the supply of aggregates, asphalt and ready-mixed concrete. It added that the merger might also affect the ability of suppliers in certain markets to compete.

Anglo American said it would hive off its unwanted Tarmac UK business into a joint venture with Lafarge UK in February – after it failed to make an outright sale of Tarmac – with both companies expected to contribute the bulk of their construction materials businesses in the UK.

Both companies acknowledged the OFT's decision and said they would continue to work with the Competition Commission "with the aim of securing approval for the merger as swiftly as possible".