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The European Commission has opened an in-depth investigation to assess the proposed acquisition of Trimo, arhitekturne rešitve, d.o.o. (‘Trimo’) by Kingspan Group plc (‘Kingspan’), under the EU Merger Regulation. The Commission is concerned that the proposed transaction may reduce competition and lead to price increases in the market for mineral fibre sandwich panels in a number of Member States and the UK.

Executive Vice-President Margrethe Vestager, responsible for competition policy, said: “Together, Kingspan and Trimo would be by far the largest player in Europe and the main supplier of high quality mineral fibre sandwich panels. These products are important for a better insulation and energy efficiency of industrial and commercial buildings, which are key to achieve the objectives of the European Green Deal. We need to ensure a healthy competitive landscape for all the businesses relying on these products to insulate their buildings.”

Kingspan and Trimo are both leading companies in the market for mineral fibre sandwich panels, which are used for the construction, renovation and insulation of a variety of industrial and commercial buildings.

The Commission’s preliminary competition concerns

The Commission’s initial investigation revealed that Kingspan and Trimo compete head-to-head in the sale of mineral fibre sandwich panels in a number of countries in Europe. At this stage, the Commission is concerned that the proposed transaction could significantly reduce competition for mineral fibre sandwich panels in Czechia, Denmark, France, Hungary, Slovakia, Slovenia and the UK.

In each of these countries, Kingspan and Trimo would hold high combined market shares, both offering high quality products and services while facing limited competition from suppliers able to offer products and services of a comparable quality. Moreover, in most of these countries the remaining competitors would be significantly smaller than the merged entity. The proposed transaction would thus remove an important competitive constraint for both of them.

In addition, the market for mineral fibre sandwich panels seems to be characterised by relatively high barriers to entry and expansion. These barriers relate notably to the necessity to have a sufficiently broad range of quality products that can obtain and maintain all necessary national and international certifications. The market investigation did not reveal any meaningful entry.

The Commission will now carry out an in-depth investigation into the effects of the proposed transaction to determine whether it is likely to significantly impede effective competition.

The proposed transaction was referred to the Commission on 23 October 2020 and notified on 3 March 2021. Trimo and Kingspan have decided not to submit commitments during the initial investigation to address the Commission’s preliminary concerns. The Commission now has 90 working days, until 20 August 2021, to take a decision. The opening of an in-depth investigation does not prejudge the outcome of the investigation.

The Commission has a continued jurisdiction over the UK because the referral procedure in this case started before the end of the transition period.

Companies and products

  • Kingspan, based in Ireland, is a manufacturer of insulating panels, light & air solutions, water and energy, and data and flooring technology.
  • Trimo, based in Slovenia, is active mainly in the manufacture of mineral fibre sandwich panels.

Merger control rules and procedure

The Commission has the duty to assess mergers and acquisitions that have been referred to it by EU Member States and to prevent concentrations that would significantly impede effective competition in the EEA 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 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

 

 

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