Following responses to its inquiry into the acquisition of London-based Metal & Waste Recycling (MWR) by EMR Ltd., the United Kingdom’s Competition and Markets Authority (CMA) has ordered EMR to sell five MWR facilities. The CMA cited concerns that the consolidation of the two companies could result in customers having fewer available suppliers in the southeastern part of England.
The CMA inquiry group’s final report on its investigation said the merger would harm the choices available to suppliers (such as car dismantlers) that supply shredder feed in England’s southeast, and others such as car manufacturers that sell large volumes of factory-generated scrap metal through contracts in the West Midlands and the northeast regions of England.
The CMA also found the merger, as proposed, may have led “to a worse deal” for customers in the U.K. that purchase new steel.
The CMA is requiring that EMR sell five of the sites it bought from MWR—three in the West Midlands, one in northeast England and one in southeast England. EMR operates 65 sites overall in the U.K. while MWR lists 13 locations on its website.
In other areas of the business, including the buying and selling of general scrap metal, the CMA did not find the merger would substantially weaken competition.
CMA inquiry chair Lesley Ainsworth states, “Having an efficient and competitive metal recycling industry is good for the environment and is important for both suppliers and waste metal customers, including those in the automotive and steel manufacturing industries.”
Adds Ainsworth, “Over the course of our inquiry we surveyed, spoke to or received comments from over 850 suppliers and customers. The evidence shows that EMR’s purchase of MWR is likely to harm competition in a number of areas and there is a material risk that prices for some suppliers and customers could worsen.”