The Competition and Markets Authority (CMA) has issued an initial enforcement order to Sims Metal Management, which will put its takeover of Morley Waste Traders temporarily on hold.
Morley Waste Traders say it handles in excess of 150,000 tonnes annually
The order was issued last week (May 4th) by the CMA, outlining that Sims must not “take any action which might prejudice a reference of the transaction”.
This includes any actions which will lead to the integration of the two companies, any transfer of ownership, or actions which “impair the ability of the Morley Waste business or the Sims Metal Management business to compete independently”.
Other measures included in the order include restricting “substantive changes” to the organisational structure of the companies and also IT integration.
An initial enforcement order is the first step the CMA takes if it wishes to investigate a takeover or merger. The next step, if the CMA chooses, will be to launch an official inquiry. No date has been given for when this may take place.
A decision is then given for the enquiry, before the CMA decides if it wishes to move to a more detailed phase 2 investigation.
Morley Waste Traders
Sims Metal announced the takeover of Morley Waste Traders in March 2018, describing the news as “a valuable addition to our Europe metals business” (see letsrecycle.com story) .
Sims Metal also acquired Lord and Midgley as part of the deal, a metal recycling company in Hull which Morley Waste Traders had previously acquired.
The CMA has “reasonable grounds for suspecting that it may be the case that Sims Group UK Limited and Morley Waste have ceased to be distinct”
Enforcement Order
Competition and Markets Authority
The acquisition by Sims meant that the Australian company, which also operates in the US and New Zealand, has a total of 50 metal recycling facilities across the UK.
Morley Waste Traders and the Lord and Midgley business joined the Sims Metal Group as part of the acquisition.
It was said at the time of the acquisition that both would continue to operate under their current names for now.
A message on the Morley Waste Traders and Lord and Midgley websites reads: “Sims Metal Management have recently taken over Morley Waste Traders. For further information regarding Sims Metal Management, please click on the following link: www.simsmm.co.uk”.
Enforcement order
The enforcement order outlines that the CMA has “reasonable grounds for suspecting that it may be the case that Sims Group UK Limited and Morley Waste have ceased to be distinct”.
The CMA also said it is considering if the merger will “result in a substantial lessening of competition”, and issued the order to ensure that no action is taken which may affect the inquiry.
A comment has been requested from Sims Metal.
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Source: letsrecycle.com Metal
