The CC has announced that it has provisionally approved the anticipated acquisition by Wienerberger Finance Service BV (Wienerberger) of Baggeridge Brick plc. The Competition Commission has provisionally concluded that the merger would be unlikely to result in a substantial lessening of competition in the supply of bricks. The Competition Commission found no evidence of co-ordinated behaviour by brick manufacturers and does not consider that the merger would increase the risk of co-ordination.

Background

On 11 December 2006, the Office of Fair Trading (OFT) decided to refer the proposed acquisition to the CC under the Enterprise Act 2002. The OFT found that Wienerberger and Baggeridge are currently the third and fourth largest clay brick manufacturers in the UK. Following the merger, there would remain only two other main clay brick suppliers (Ibstock and Hanson). The OFT was concerned that, although the merger could create a third force, which might be able to compete more effectively with Ibstock and Hanson, given the market features of the UK bricks sector, the merger could increase the possibility of co-ordinated pricing behaviour by the three remaining suppliers. This could result in higher prices, in particular for supply to customers who purchase large volumes of bricks (representing a significant share of total purchases).