MOSCOW (MRC) -- Sika AG’s 5.5 billion-franc (USD5.8 billion) purchase of MBCC Group faces an in-depth investigation by the UK’s merger watchdog over concerns the deal may weaken national competition in the supply of chemical admixtures, said Reuters.
Swiss building materials company Sika and its German rival MBCC had offered concessions that failed to sway the regulator, the Competition and Markets Authority said in a statement on Wednesday. The offer wasn’t a clear-cut solution to the concerns identified last months, it said.
The CMA already flagged concerns last month, saying that the combined business would account for over half of admixtures supplied in the UK after the merger and face limited competition, giving customers less choice and potentially leaving them facing higher costs and reduced innovation. Sika said in a statement the delays stemming from the CMA probe “will not impact the strategic attractiveness of the transaction.” It said the closing of the deal is “now targeted for the first half of 2023 instead of at the end of 2022 as previously announced.”
Sika, which makes sealants, mortars and other building adhesives, has been stepping up its pace of dealmaking as Chief Executive Officer Thomas Hasler seeks to tap demand for new materials supporting sustainability and the shift to electric vehicles. The MBCC transaction ranks as its largest-ever deal, and it’s announced at least seven other acquisitions this year, according to data compiled by Bloomberg.
As per MRC, Sika is still waiting for regulators to approve its planned acquisition of Germany-based MBCC Group. Sika agreed to acquire MBCC in November 2021. Sika keeps co-operating closely with authorities and currently hopes to complete the deal by the end of 2022, it said.