The Office of Fair Trading (OFT) is considering an offer by Jewson to sell a branch in each of 22 local areas to remedy competition concerns raised by its completed acquisition of Build Center.
The OFT concluded that the merger would not give rise to competition concerns nationally because sufficient competitors would remain in the market. It also found that the presence of Saint-Gobain companies upstream of general builders merchants (for example, in the plaster 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.
Ali Nikpay, OFT senior director, said: "While 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."
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.