Sims Metal's Acquisition of Morley Waste Put on Temporary Hold

SEATTLE (Scrap Monster): The Competition and Markets Authority (CMA) has ordered an investigation into the acquisition of assets of Morley Waste by Sims Metal Management (SMM). As per reports, the CMA has issued an Initial Enforcement Order (IEO) to the leading global metals recycling company. SMM is yet to comment on the order. The order will put the acquisition on temporary hold, preventing the merging parties from taking any pre-emptive action, sources said.

The order issued on May 4^th prevents SMM from taking any action which might prejudice a reference of the transaction. The parties to the merger must not initiate any action that may lead to integration of the two companies or transfer of ownership. Furthermore, no action which damages the rights of two businesses to compete independently could be taken until the completion of the investigation.

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The investigation will examine whether the merger would result in creation of new entity that in turn would substantially lessen the competition in the UK market. The IEO is considered as the first step by CMA in investigating the merger. In the next step, the Authority could launch an official inquiry.

Earlier in March this year, SMM had announced its decision to acquire the northern English metal recycler Morley Waste Traders Limited and its subsidiary Lord and Midgley Limited. With the addition of 10 facilities across Yorkshire, owned by Morley Group, SMM’s total number of metal recycling facilities across the UK had jumped to 50. At the time of acquisition, both the companies had noted that they would continue to operate under their current names. SMM had also noted that the acquisition will help it to enhance its local market presence and extend its footprints into new markets.