Competition investigation rules recycling sites must be sold

Three scrap metal sites in the West Midlands must be sold as part of the merger of two recycling giants, the Competition and Markets Authority (CMA) has ruled.

European Metal Recycling (EMR) and Metal Waste Recycling (MWR) are the largest and fourth-largest recyclers of scrap metal in the UK respectively and the deal to bring the two together has been subject to a six-month CMA investigation.

It has now decided that MWR’s tendering and new production steel businesses in the region, which are based at Cradley, Hockley, and Telford, must be sold.

In addition, sites in Hitchin in Hertfordshire and Seaham in the North East must also be sold.

The CMA has judged prices might worsen for suppliers and customers if EMR were to own those sites.

“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,” said inquiry chair Lesley Ainsworth.

“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.”

The CMA said the sale of those sites, including all staff, assets and contracts, was required “to restore the competitive constraint” that MWR had created before the deal was agreed.

The inquiry group’s 307-page report said the merger would affect suppliers including car manufacturers in the West Midlands, that sell large volumes of scrap metal through tendered contracts.

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