Fears on Baggeridge takeover
Baggeridge Brick may have to unload some of its five factories to clear the way for an £89 million takeover, according to sources close to the deal with Australian firm Wienerberger. Baggeridge Brick may have to unload some of its five factories to clear the way for an £89 million takeover, according to sources close to the deal with Australian firm Wienerberger. Sources say as many as two of the plants - including those in Sedgley, and Hartlebury and Waresley, near Kidderminster, could be sold to avoid competition laws. The offer was tabled last August but was referred to the Competition Commission last month after it emerged the tie-up would leave the UK bricks market with three principal suppliers accounting for 90 per cent of sales. But a source close to the deal has revealed Baggeridge, which employs 575 people across the board, could be forced into selling factories. "The reason the deal was referred was not because of the 25 per cent market share that would be created but because four competitors were going down to three," the source said. Read the full story in the Express & Star
Baggeridge Brick may have to unload some of its five factories to clear the way for an £89 million takeover, according to sources close to the deal with Australian firm Wienerberger.
Sources say as many as two of the plants - including those in Sedgley, and Hartlebury and Waresley, near Kidderminster, could be sold to avoid competition laws. The offer was tabled last August but was referred to the Competition Commission last month after it emerged the tie-up would leave the UK bricks market with three principal suppliers accounting for 90 per cent of sales.
But a source close to the deal has revealed Baggeridge, which employs 575 people across the board, could be forced into selling factories.
"The reason the deal was referred was not because of the 25 per cent market share that would be created but because four competitors were going down to three," the source said.
"The best guess from the camp is that it's a 50-50 call which way it goes. The most likely outcome is 'Yes, but', meaning Baggeridge would have to sell a factory or two."
Watchdog
Baggeridge's five plants in the UK also include bases in Kingsbury, near Tamworth, compared to Wienerberger's nine plants. If the two do merge, they would become the country's third biggest brick firm, with a 24 per cent market share. A decision from the watchdog is not expected until May and any collapse of the deal would leave Baggeridge with a hefty legal bill.
The firm announced its pre-tax profits had slumped by more than a third due to soaring energy costs and low demand, down to £3.41 million from £5.21 million last year.
The source, quoted on business news website hemscott.com, said it was unclear who would be in the running to snap up any factories sold off by Baggeridge.
They also suggested the Commission's interviews with Baggeridge customers had uncovered a high level of opposition to the deal, because of fears the takeover would see prices rise. Baggeridge Brick currently has nine per cent of the UK market.
No-one was available from Baggeridge for comment this morning.
