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Breedon Aggregates trading in line

Last updated: 22:27 26 Apr 2016 AEST, First published: 17:53 26 Apr 2016 AEST

Concrete rings
The two companies operate over 200ready-mixed concrete sites across England, Wales and Scotland.

Breedon Aggregates Ltd (LON:BREE) and the Competition and Markets Authority (CMA) appear to be closing in on an accord over Breedon's acquisition of Hope Construction.

Breedon has previously indicated it expected to sell 14 ready-mixed concrete plants currently owned by Breedon and Hope Construction Materials to head off concerns the CMA might have had about the acquisition, and the CMA has indicated that it has reasonable grounds for believing that undertakings offered by Breedon in respect of the acquisition will be acceptable.

Breedon said it fully expects to be able to finalise the required undertakings to the CMA's satisfaction and complete the required divestments in the near future, paving the way for completion of the acquisition later this summer.

The CMA had expressed concern that the acquisition could give rise to competition concerns in relation to 27 ready-mixed concrete sites, and invited Breedon to offer a solution that would put the CMA's mind at rest.

The CMA's concerns came as little surprise to Breedon, and it responded by proposing to sell 14 of the sites to a buyer approved of by the CMA.

“The CMA has decided that there are reasonable grounds for believing that the undertakings offered by Breedon, or a modified version of them, might be accepted by the CMA,” the CMA's official statement said.

The CMA will make its mind up by 23 June, although it does have the option to extend the consideration period to 25 August if it considers there are special reasons to do so after consulting the public.

In a separate announcement, Breedon said trading in the first three months of 2016 had been in line with management expectations, despite a slow start to the year in Scotland.

At the company's annual general meeting, Peter Tom, Breedon's chairman, was set to tell shareholders: "The outlook for our industry continues to be positive, with ONS estimates suggesting a pick-up in construction activity since December 2015 and the MPA forecasting double-digit growth in volumes of all our key products over the next three years; however, the timing and scale of some major projects are still likely to be subject to change and the forthcoming [EU membership] referendum may create uncertainties in the short term.”

Nevertheless, against this backdrop the company remains confident of meeting market expectations this year.

Shares in Breedon were down 0.7% at 74.35p in lunchtime trading.

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