The Competition & Markets Authority (CMA) has told EMR to sell five sites acquired last year through a merger with Metal & Waste Recycling (MWR) because of concerns about the impact on prices.
EMR, which is the UK’s largest scrap metal recycler, according to the CMA, bought London-based MWR in August last year.
MWR is the fourth largest scrap metal recycler in the UK and has 12 sites that process more than 800,000 tonnes a year of ferrous and non-ferrous metal.
The CMA launched an inquiry into the merger following fears that it could “lead to a worse deal for customers and suppliers”.
An inquiry report has now ruled that the merger would “harm the choices available” to scrap metal suppliers, such as car breakers, in the south-east of England, as well as car manufacturers that sell large volumes of scrap metal through tendered contracts in the West Midlands and the north-east.
The five sites that must be sold include three in the West Midlands, one in the north-east and one in the south-east.
The CMA said: “In other areas of the business, including the buying (not via a tendered contract) and selling of general scrap metal, the CMA did not find the merger would substantially weaken competition.”
Inquiry chair Lesley Ainsworth, said: “During the course of our inquiry, we surveyed, spoke to or received comments from more than 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.”
An EMR spokesperson said: “The CMA has made its decision and we will be looking to comply with its remedial actions in the required time.
“In the meantime, both EMR and MWR continue to trade and support their customers normally as independent entities.”