The Competitions and Markets Authority (CMA) has called on metals recycling firm EMR to offer “acceptable undertakings” to avoid a phase two investigation into its merger with Metal & Waste Recycling (MWR).
EMR is considered the largest metal recycling company in the UK
The CMA explained that the two companies are two of the main operators offering to purchase waste scrap metal in North London. Following the deal, the merged company “will face limited competition from other metal recyclers in this area”.
“The CMA is therefore concerned that this merger could lead to a reduction in choice, price, quality and service to customers,” the statement read.
History
EMR (European Metal Recycling) acquired Metal & Waste Recycling at the end of August 2017 (see letsrecycle.com story). In September, the CMA issued an initial enforcement order before launching an official merger inquiry two months later.
The CMA invited comments on a consultation on the merger, and has now revealed that it has decided the merger “may be expected to result in a substantial lessening of competition within a market or markets in the UK”.
If it proceeds with a phase 2 investigation, the CMA has a statutory period of 24 weeks to conduct its investigation and publish a report. This period can be extended by up to eight weeks at the CMA’s discretion.
In a statement, an EMR spokesperson said: “We are in ongoing discussions with the CMA about their decision and it is too early for us to be able to comment further at this stage.”
Phase 2
A phase 2 investigation is often referred to as a “full investigation” to see if there is a substantial lessening of competition. It could then issue a prohibition on the merger if it is deemed necessary.
EMR has previous experience of a similar investigation. In 2013 it bought the metals recycling business of SITA UK (now Suez) and this was investigated by the Office of Fair Trading (the former equivalent of the CMA). In 2014 the OFT cleared the deal after a three month study (see letsrecycle.com story).
The company claims on its website to process around 10 million tonnes of recycled waste a year. The CMA explains its role as: “We work to promote competition for the benefit of consumers, both within and outside the UK. Our aim is to make markets work well for consumers, businesses and the economy.” CMA is a non-ministerial department.
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Source: letsrecycle.com Metal
