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OFT considering Jewson branch sale offer

THE Office of Fair Trading is considering an offer by Coventry-based Jewson to sell a branch in each of 22 local areas to remedy competition concerns raised by its completed acquisition of Build Center.

Jewson and Leamington Spa-based Build Center are two of the country's largest general builder's merchants. Jewson has a chain of 510 general builder's merchants in the UK operating under the Jewson and 'Gibbs and Dandy' brands and also operates some specialist building materials distribution businesses.

It is part of the group of companies ultimately controlled by Compagnie de Saint-Gobain (Saint-Gobain), the French multinational active in many building materials sectors.

There are 149 Build Center branches in the UK, trading primarily under the Build Center brand, including a number of specialist glass, ironmongery and timber outlets.

The OFT concluded that the merger would not give rise to competition concerns nationally because sufficient competitors would remain in the market. The OFT also found that the presence of Saint-Gobain companies upstream of general builders merchants (for example, in the plasters and plasterboard sectors) would not give rise to competition concerns.

However, having considered a large volume of evidence including a survey of nearly 10,000 builders, the OFT concluded that the deal raised substantial competition concerns in 22 local areas in England, Wales and Scotland. This was because there were few remaining general builders merchants in these local areas and the OFT was concerned that builders and other tradesmen might see an increase in prices for building materials as a result.

In order to address these concerns, Jewson has offered undertakings to divest at least one branch in each of the 22 affected local areas to restore pre-merger competition levels.

Ali Nikpay, OFT senior director and the decision maker in this case, said: “Whilst we concluded that the merger raised no competition issues on a national basis, we were concerned that builders in some local areas could lose out as a result of reduced competition.

“We are therefore considering branch sales offered by the parties to resolve these issues.'

Source : Andy Coyne – The Business, West Midlands

09 February 2012
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Thank you for the excellent presentation that you gave at Woodbury Park on Thursday morning. It was very interesting and thought-provoking for our Retail members. The feedback has been excellent.

Martin Elliott. Chief Executive - Home Hardware.

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