The Warrington-based metals recycling giant acquired five metals sites in Boreham, Coventry, Lenwade, Norwich and Sheffield from SITA UK in September this year with some 100 staff subsequently transferred to EMR (see letsrecycle.com story).
A spokesman for the OFT said the review was standard procedure and the body had a duty to take action under section 71 of the Enterprise Act 2002.
The regulator will decide whether to clear the deal, order changes such as the sale of anti-competitive assets, or make a reference to the Competition Commission for further action.
The OFT spokesman added: Section 71 of the Enterprise Act allows the OFT to accept initial undertakings for the purpose of preventing pre-emptive action by the parties to a completed merger whilst the OFT is considering whether to make a reference to the Competition Commission. The undertakings are without prejudice to the OFT’s ongoing investigation into the completed merger.”
Timetable
Comments are due into the OFT by November 22. The OFT can look at a merger anytime in the four months after completion. A decision is expected at the end of a 40 working day timetable which is yet to begin.
A spokeswoman for EMR said: The OFT are duty bound to consider this, we are in the process of providing them with all necessary information.
A spokesman for SITA UK said that it had no comment on the matter.
The OFT is expected to publish more information about the timetable for the investigation on its website shortly.
Reflecting on the OFT involvement, one metal recycling expert commented that the acquisition of the SITA UK metal recycling businesses would appear unlikely to breach fair trading rules.
He said: Some 15 years ago EMR was created through the coming together of two giant metal recycling businesses, with the Sheppards business in north west England acquiring Swindon-based Coopers. There was a brief look at this deal by the regulatory authorities but under the terms of the European Coal and Steel Community it was approved and the SITA UK metals purchase is small by comparison.
ECSC
He added: The European Coal and Steel Community, which was really the precursor to the European Union was actually abolished in 2002 and absorbed into the EU itself. This means that the UK authorities may have stronger regulatory powers now without the ECSC. However, in UK terms there remain a number of different outlets for scrap metal and although it is fair to say that EMR are very much a major player in the sector, it would be a big surprise if the OFT was to rule against this latest EMR purchase.
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