The Competition and Markets Authority (CMA) has announced that it will be carrying out an in-depth investigation into the market impact of Kingspan Holdings’ (Panels) acquisition of materials supplier Building Solutions, which is owned by SIG Trading – the process of which can result in the acquisition being blocked.
Earlier this month, the CMA raised concerns about the acquisition, which was agreed in a £37.5 million deal in October. The watchdog invited the two companies to address its concerns by April 16, but both Kingspan and SIG informed the CMA that they would not be offering any more information to address the concerns.
In response, the CMA announced on April 21 that the investigation would be referred for a ‘phase two’ investigation, in line with section 33(1) and in accordance with section 34ZA(2) of the Enterprise Act 2004.
The £37.5 million deal acquisition was agreed in October last year after SIG carried out a strategic review and moved to offload its Building Solutions division.
The CMA raised concerns over the fact that Kingspan is already the leading provider of standard foam sandwich panels in the UK, which are most commonly used as insulated cladding. The competition watchdog highlighted that the company already owns a number of businesses that supply the products.
Building Solutions also sells a range of insulation and specialist construction products through its businesses including Steadmans, Trimform, Advanced Cladding and United Roofing Products.
According to the CMA, the acquisition would potentially mean that Kingspan only faces serious competition from one other UK-based firm, Tata Steel.
The deadline for the investigation to conclude is October 5.
