European Metals Recycling (EMR) has been ordered to pay penalties totalling £300,000 by the Competitions Authority for failing to comply with an enforcement order regarding a 2017 acquisition.
The Competition and Markets Authority (CMA) confirmed the penalties earlier this month, issued in relation to the takeover of Metal and Waste Recycling (MWR) by EMR’s parent company, the Ausurus Group.
EMR is considered to be the largest UK-based metal recycling company
In August 2017, EMR and Bain Capital Credit entered into a binding agreement for EMR to acquire MWR through the purchase of the whole of the issued share capital of MWR’s holding company, CuFe Investments Limited. The value of the transaction was approximately £52.6 million.
The CMA announced the following month that it would be investigating the deal, over the likely impact on competition within the scrap metal sector, and issued an initial enforcement order (IEO) to EMR and the Ausurus Group.
This order, according to the CMA, placed a number of restrictions on EMR with regard to Metal & Waste over the integration of the businesses (see letsrecycle.com story).
The fine issued relates to non-compliance with elements of that order.
In its ruling this month, issued on 10 January 2019, CMA said that Ausurus and EMR had failed to comply with the order as they had “directed customers of the CuFe Business to make payment into bank accounts of the Ausurus Business”, as well as “making payments to suppliers of scrap to the CuFe Business from bank accounts of the Ausurus Business”.
According to the competitions body, this was done without its permission, and failed to “maintain separation” of the two companies as set out in the order. This has led to an individual fine of £150,000 for the company.
EMR was also handed an additional £150,000 fine for “failing to give the MWR managing director a clear delegation of authority to take decisions without consulting Ausurus or EMR”.
In a statement outlining the penalty notice order, the Authority stated: “The CMA finds that Ausurus and EMR have no reasonable excuse for their failure to comply with the IEO. The CMA considers that it is appropriate to impose a penalty in the interests of specific and general deterrence and because of the seriousness of the breaches.”
‘Difficult process’
EMR Liverpool- one of 65 metal recycling sites operated by the company in the UK
Commenting on the ruling a spokesperson for EMR, said: “This has been a very difficult process for EMR, particularly as a degree of integration had already occurred prior to the commencement of the CMA enquiry and the imposition of the initial enforcement order (IEO).
“EMR has endeavoured at all times to comply fully with the terms of the IEO. The nature of the two alleged infractions which led to this fine are quite technical in nature and entirely inadvertent. When they were brought to the attention of EMR by the CMA, immediate remedial action was taken.
“Whilst naturally disappointed with the outcome of the CMA enquiry, EMR remains committed to complying fully with the requirements of the CMA.”
In August 2018, EMR was ordered to sell five of the sites it acquired as part of the deal (see letsrecycle.com story), which came as a result of the CMA’s report into the merger.
EMR operates 65 metal recycling sites across the UK processing more than 800,000 tonnes a year of ferrous and non-ferrous metal. It is described by the CMA as the largest recycler of scrap metal in the UK, while MWR is the fourth largest.
The post EMR fined £300,000 by competitions authority appeared first on letsrecycle.com.
Source: letsrecycle.com Metal
