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Further investigation needed into joint venture of asphalt plants of construction companies BAM and Heijmans

05-11-2019

The plans of Dutch construction companies BAM and Heijmans to combine their asphalt plants have not yet been cleared by the Netherlands Authority for Consumers and Markets (ACM). BAM and Heijmans each operate their own asphalt plants, which also supply other road construction companies. Further investigation is needed into whether or not competing road-construction companies will continue to have sufficient options for procuring asphalt following the combination of the BAM and Heijmans plants, meaning sufficient competition will remain on the road construction market.

Road construction companies pick an asphalt plant near the road that they are building for various reasons. In that decision-making process, transportation costs play a large role. More than 30 asphalt plants are located across the Netherlands. BAM and Heijmans wish to combine their ten asphalt plants into a single company. In most regions, the combination of the BAM and Heijmans asphalt plants will not create any anticompetitive concerns.

In two specific regions, however, ACM will take a closer look at the combination’s effects on competition. It will focus on the asphalt plants in the southern Dutch towns of Helmond (Brabant Asphalt Plant, BAC) and Stein (Limburg Asphalt Plant, ACL). In the Helmond region, the combination of BAM and Heijmans will become a major competitor in the asphalt production market, while the asphalt plant in Stein already has a large market share. The investigation will reveal whether sufficient competition will remain on these markets that would allow other road-construction companies to continue to be supplied asphalt at competitive prices and conditions.

What are the next steps?

If BAM and Heijmans wish to combine their asphalt plants, they will have to apply for a merger license with ACM. If they file such an application, ACM will launch a further investigation into the competitive landscape in the two aforementioned regions.

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.