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EMR takeover challenged under competition law

The Competition & Markets Authority (CMA) has said that EMR’s takeover of Metal & Waste Recycling (MWR) could lead to a reduction in choice, price, quality and service to customers.

After an initial investigation, EMR has been told to offer “acceptable undertakings” to address concerns about its August 2017 purchase to avoid an in-depth investigation.

CMA found that EMR and MWR were the two main companies buying scrap metal in north London and the surrounding area.

“Following the deal, the merged company will face limited competition from other metal recyclers in this area,” it said. “The CMA is therefore concerned that this merger could lead to a reduction in choice, price, quality and service to customers.”

When the CMA invited comments at the start of its inquiry in November 2017, it said it was considering issues under the merger provisions of the Enterprise Act 2002 and whether that meant a “substantial lessening of competition” for goods or services.

At the time of the purchase, EMR said: “The two companies have many similar cultural values so we believe the acquisition process will go very smoothly. We are maintaining a ‘business as usual’ approach during the transition to minimise any impact for our employees and customers.”

In response to the latest development, an EMR spokesman said: “We are in ongoing discussions with the CMA about its decision, and it is too early for us to be able to comment further at this stage.”

The Metal & Waste website said the company processed more than 800,000 tonnes a year of ferrous and non-ferrous metals.

The company’s roots go back to 1970 when GAD Holdings was formed. In 2005 it was awarded the Queen’s Award for Enterprise for International Trade and became Metal & Waste Recycling.

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