Cheshire-based chemical company Ecolab must sell off Holchem, the competition watchdog has said.
The Competitions and Markets Authority (CMA) said the action would “prevent potential price rises or a lower quality of service as a result of their merger”.
Ecolab acquired the Bury-based chemical company Holchem Group in December 2018.
The CMA's decision follows an in-depth phase two investigation into the merger of “two of the largest suppliers of cleaning chemicals to food and drink manufacturers in the UK”.
The CMA raised concern over the merger in August, after an investigation provisionally found the organisation would face limited competition from other suppliers.
The merger would create an organisation with a market share of 40-50 per cent, which is much greater than any of the remaining competitors, the CMA said at the time.
Speaking on the decision published yesterday (October 7), inquiry chair Kirstin Baker said the watchdog’s concerns can only be addressed by blocking the merger and ordering the sell-off.
She said: “We have carried out a thorough investigation analysing a large amount of data from the companies as well as evidence collected from both customers and competitors.
“We concluded that these two companies compete closely and this deal could have very serious effects – prices could go up or quality standards in crucial support services could get worse.”
