The proposed acquisition by H+H Celcon Ltd of Marley Building Materials Ltd

No. ME/1679/01

A report under section 125(4) of the Fair Trading Act 1973 on the advice of the Director General of Fair Trading, given on 20 December 2002, to the Secretary of State for Trade and Industry under section 88(2) of the Act

In this submission I report under section 88(2) of the Fair Trading Act 1973 (the Act) on the outcome of the negotiations with H+H Celcon on the terms of the undertakings that you requested that I seek following your announcement on 12 November.

BACKGROUND

On 26 June, you announced your acceptance of the CC's conclusions, supported by my advice dated 17 June, that the proposed acquisition should be prohibited, and you requested the OFT to seek undertakings from H+H Celcon to give effect to your decision.

Following consultation with H+H Celcon, I advised you on 9 October that the OFT was satisfied that H+H Celcon were unlikely to give full prohibition undertakings in the form originally sought within a reasonable time. I therefore recommended that you request the current form of undertakings, prohibiting the acquisition of the entire Marley Building Materials (Marley) business, while not precluding it from seeking to acquire one of the Marley production plants. Provided any such acquisition fell within the scope of UK merger control, the completion of the arrangements would be subject to a favourable decision by you or, once the Enterprise Act 2002 is in force, by the OFT or the CC.

THE UNDERTAKINGS

H+H Celcon has agreed to give undertakings in the form requested following your announcement on 12 November.

CONCLUSION

I consider that the undertakings attached will prevent the adverse effects identified by the CC in their report. In the event of a partial acquisition being contemplated, an investigation by the OFT, and the CC if required, would consider whether such an acquisition would raise competition concerns. If no such acquisition is contemplated, the status quo is maintained, so that no adverse effects would arise.

H+H Celcon has indicated that it accepts the terms of the undertakings and has signed them in advance. This does not in any way prejudice your decision as to whether or not the undertakings are satisfactory, but will allow prompt publication should you decide to accept them. I recommend that you accept the undertakings attached (pdf file 23 kb) and that they be published in accordance with section 88(2A) of the Act.

See previous OFT advice on this case:
9 October 2002
17 June 2002
5 February 2002

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