Dutch construction companies BAM and Heijmans are allowed to combine their asphalt plants, creating a joint venture. This has been the conclusion of the Netherlands Authority for Consumers and Markets (ACM) following an extensive investigation. BAM and Heijmans are active on various submarkets of the construction sector, including road construction.
ACM has established that, in the regions where BAM and Heijmans operate asphalt plants, sufficient other plants are also active. It is therefore not plausible that, as a result of the combination of their plants, BAM and Heijmans are able to raise asphalt prices or reduce supply. Because of the options for procuring asphalt from other suppliers, as well as the relatively limited transportation costs of asphalt in relation to the costs for road construction and maintenance, sufficient competition will remain on the road construction market after the combination.
With regard to eight of the ten asphalt plants involved in this combination, ACM had already concluded that sufficient competition will remain. The more detailed investigation focused on the regional positions of two asphalt plants in the southern Dutch towns of Helmond (Brabant Asphalt Plant, BAC) and Stein (Limburg Asphalt Plant, ACL). ACM has conducted an extensive investigation among haulers, road-construction companies, other asphalt plants, and among clients such as municipalities, the province of Limburg, and the Ministry of Infrastructure and Water Management.
The investigation has revealed that BAM and Heijmans will experience sufficient competitive pressure from other asphalt plants. In addition, they will continue to depend on selling asphalt to other road-construction companies if they want to operate the two asphalt plants at a profit. Also, BAM and Heijmans turn out to have too limited a position on road-construction projects in Limburg (or more specifically in southern Limburg) to be able to keep other road-construction companies off the market effectively. ACM therefore concludes that the plants in Helmond and Stein will have sufficient competition, and that the plants will not be able to raise prices or reduce supply.
ACM’s concentration control: mergers, acquisitions and joint ventures
With any merger, acquisition or joint venture, an investigation is needed into whether sufficient competition will remain on that market. Competition ensures that products are of high quality, and that they are offered on the market at competitive prices. That is why ACM decides whether or not companies are allowed to merge, to acquire competitors, or to launch joint ventures. ACM assesses whether, after the concentration, markets continue to work well for people and businesses.