The CMA launched a phase 1 Investigation after Heidelberg-owned Hanson announced it would be buying £220m turnover earthmoving and demolition waste recycling contractor Mick George last year.

Both Hanson and Mick George supply aggregates and ready-mixed concrete.After investigating the deal, the CMA found it gives rise to competition concerns in relation to the supply of non-specialist aggregates or ready-mix concrete in eighteen local markets in the East of England and the East Midlands.

In each of these local markets, the two businesses currently have a large, combined presence, with limited competition from other suppliers.

The CMA is therefore concerned that the deal could result in limited choice for local customers, leading to higher prices and lower quality products for contractors working in these areas.

Colin Raftery, CMA Senior Director for Mergers said: “These products are an important input for building projects, so a loss of competition between two of the main suppliers could result in increased construction costs for businesses and public bodies.

“In many areas where both businesses are active, sufficient competition will remain. But in some local markets, where there are not enough strong alternatives to the merging business, the deal could limit customer choice.

“Unless the companies put forward a solution, we will need to take a deeper look into the potential impact of reduced competition in these local areas.”

Hanson and MGL now have five working days to address the CMA’s concerns. If they are unable to do so, the merger will be referred for an in-depth phase 2 investigation.