The ACCC is seeking views on a proposed court-enforceable divestiture undertaking offered by Sika in relation to its proposed acquisition of MBCC Group.
Sika and MBCC Group supply construction chemicals and materials including chemical admixtures, fibres and concrete works. Chemical admixtures are an essential component in the production of concrete and cement, used to chemically modify its properties.
The ACCC has preliminary concerns that the transaction would substantially lessen competition in Australia in the supply of chemical admixtures by combining the two largest suppliers resulting in a likely market share of approximately 80 per cent.
To address the ACCC’s concerns, Sika is offering a court-enforceable undertaking to divest MBCC Group’s entire business including its subsidiary, Bluey Technologies in Australia and New Zealand.
This is part of a global remedy being proposed by the parties which would also commit Sika to divest MBCC Group’s admixture business in the European Economic Area, Switzerland, United Kingdom, United States and Canada including several research and development facilities.
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The MBCC Group businesses would be sold to a single purchaser approved by the ACCC and relevant international competition agencies. The ACCC has liaised closely with other competition agencies in relation to the merger review and remedy proposal.
“In assessing the divestiture undertaking, we must be satisfied it will effectively address our competition concerns in Australia,” ACCC Commissioner Stephen Ridgeway said.
“We are seeking views from market participants as to whether the proposed divestiture undertaking would create an effective, independent and long-term competitor to Sika.”
“The release of an undertaking for public consultation is consistent with our usual practice and should not be interpreted as an indication that the ACCC will ultimately accept the undertaking and not oppose the transaction,” Mr Ridgeway said.
The ACCC invites submissions on the proposed undertaking by 3 February 2023.