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Johnston deal lapses after OFT referral

MATERIALS

AGGREGATES supplier Anglo-American has withdrawn its £53 million deal to buy materials firm Johnston after government officials announced it was to be probed by the Competition Commission.

The firm, which is Tarmac's parent company decided to let the proposed deal lapse following the decision, leaving the way open for other offers.

The Office of Fair Trading referred the massive deal to the watchdog last week, citing a lessening of competition for aggregates and asphalt in the West Midlands as one of its reasons.

Anglo-American tabled a £53 million bid for the company in August, pipping rival Ennstone's £48 million offer.

But even though Anglo-American had agreed to offload Johnston's Leinthall quarry in Herefordshire to Ennstone the OFT still has concerns over the deal.

It claimed the transfer of these assets alone might not be sufficient to tackle competition concerns raised by the merger.

OFT chairman John Vickers said: 'This merger requires further investigation by the Competition Commission to assess the competition concerns and propose any remedies.'

An Anglo-American spokes-man said:

'Anglo-American is disappointed that the OFT did not accept the divestment.AngloAmerican has determined the offer will lapse.'