The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Joris Ide Group (Steel Partners NV/SA) of Belgium by rival Kingspan Group Plc of Ireland. Both companies manufacture sandwich panels and construction sheets in several production sites in the European Economic Area (EEA). The Commission concluded that the transaction would raise no competition concerns, in particular because the merged entity will continue to face sufficiently strong competition after the merger and customers will still have sufficient alternative suppliers in all markets concerned.
Sandwich panels used in the construction industry as cladding or roofing and are made of an insulation core (polyurethane or mineral wool) covered by two steel facings. Construction sheets are also used in the construction industry for cladding, roofing and decking, and are made from cold rolled galvanised or colour-coated flat carbon steel.
The Commission examined the effects of the merger on competition in the areas of sandwich panels with a focus on three geographic areas with significant overlaps, namely (i) the Benelux countries and surrounding area, (ii) the United Kingdom and Ireland, and (iii) Hungary and surrounding area. The Commission also looked at the competitive landscape for mineral wool panels (a type of sandwich panels) at EEA level and for construction sheets in Austria and Hungary.
The Commission's investigation showed that post-merger there will still be several players with spare capacity, including the two integrated suppliers ArcelorMittal and Tata Steel, supplying sandwich panels in North-Western Europe. Moreover, it is easy for competitors to expand in other geographic areas as the cost of investments for setting up a new production line is relatively limited.
In the UK and Ireland, Kingspan already holds a large part of the market, especially for foam sandwich panels. However, the Commission found that the operation would not lead to competition concerns as Joris Ide has no production facilities in the area and the parties are not close competitors there. Furthermore customers will still have sufficient alternative suppliers, such as Tata Steel, and there are other potential entrants.
In the region surrounding Hungary, the merged entity's combined market share will remain moderate for the supply of sandwich panels, competitors are not capacity constrained, and customers will have sufficient alternative suppliers in the area.
The Commission's investigation also found that several competitors such as Trimo, Ruuki and Eurobond will continue to supply mineral wood panels in the EEA after the transaction.
Finally, the Commission concluded that the transaction was unlikely to lead to less competition or higher prices in relation to the production of construction sheets in Hungary and in Austria. Indeed, customers will have sufficient alternative suppliers.
The Commission therefore concluded that the proposed transaction would raise no competition concerns.
The transaction was notified to the Commission on 9 February 2015 following a referral request by the merging companies.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the European Economic Area or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
More information will be available on the competition website, in the Commission's public case register under the case number M.7479.