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OFT refers acquisition by Anglo American plc of Johnston Group PLC

The OFT today referred the anticipated acquisition by Anglo American plc, of Johnston Group PLC to the Competition Commission (CC). Anglo American is the parent of Tarmac Limited.

The OFT believes that arrangements are in progress which, if carried into effect, will result in a relevant merger situation, and that the creation of that situation may be expected to result in a substantial lessening of competition within markets for Aggregates and Asphalt in the West Midlands, where Johnston and Tarmac operate.

Anglo American has offered to divest Johnston's Leinthall quarry and asphalt plant with a view to resolving competition concerns arising from this transaction. While the OFT generally welcomes structural undertakings, it is uncertain whether transfer of these assets alone would be sufficient to address the competition concerns raised by the merger.

John Vickers, OFT Chairman said:

'This merger requires further investigation by the Competition Commission to assess the competition concerns and propose any remedies.'

The CC is expected to report by 15 March 2005.

NOTES

1. The Enterprise Act 2002 empowers the Office of Fair Trading to refer to the CC actual or proposed mergers for investigation and report which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or which involve the acquisition of turnover in the UK of over £70m.

2. The CC may extend the 24 week period within which it is required to publish its report by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.

3. The text of this decision will be placed on the mergers section of this website as soon as is reasonably practicable.

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