The European Commission has opened an in-depth investigation to assess the proposed acquisition of Recticel by Greiner under the EU Merger Regulation. The Commission is concerned that the proposed acquisition may reduce competition in the supply of certain technical foam products.
Greiner and Recticel are both leading producers and suppliers of technical foams in Europe.
Technical foams are polyester-based or polyether-based flexible foams used for a variety of uses and applications in diverse industries. They are an important input for producers of automotive components such as headliners, car seats and engine compartment insulation, but also to construction, household and clothing industries.
The Commission’s preliminary competition concerns
The Commission’s initial market investigation identified a number of preliminary concerns in relation to the combination of Greiner’s and Recticel’s technical foams businesses.
At this stage, the Commission is concerned that the transaction may lead to reduced choice and higher prices for technical foam rolls; noise, vibration, and harshness reducing foams as well as filter foams in a number of local European markets.
For each of the above technical foam products, the merged entity would hold high combined market shares in already concentrated markets, in particular locally in central European countries such as Austria, Germany, Poland and the Czech Republic. Greiner and Recticel are among the very few suppliers that offer the full range of properties and specifications of technical foam and have an extensive geographic footprint. In particular, customers in the automotive industry often rely on the two companies due to their reputation, broad product portfolio and qualification by automotive original equipment manufacturers (OEMs).
The Commission will now carry out an in-depth investigation into the effects of the proposed transaction to determine whether its initial competition concerns are confirmed.
The transaction was notified to the Commission on 18 October 2021. Greiner decided not to submit commitments during the initial investigation to address the Commission’s preliminary concerns. The Commission now has 90 working days, until 8 April 2022, to take a decision. The opening of an in-depth investigation does not prejudge the outcome of the investigation.
Companies and products
Greiner, headquartered in Austria, is a family-owned company, which manufactures and supplies plastic packaging, medical technology, machinery and foam worldwide for a wide range of applications. Greiner also produces certain foam-based products such as acoustic components for car engines and cushions for aircraft seats.
Recticel, headquartered in Belgium, is a globally active manufacturer and supplier of foam, bedding products and insulation solutions for the construction industry.
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).
In addition to the present transaction, there are currently seven other on-going phase II merger investigations: the proposed acquisition of Arm by NVIDIA, the proposed acquisition of Kustomer by Facebook, the proposed acquisition of Grail by Illumina, the proposed merger between Cargotec and Konecranes, the proposed acquisition of Air Europa by IAG, the proposed acquisition of Trimo by Kingspan Group and the proposed acquisition of DSME by HHiH. More information will be available on the Commission’s competition website, in the public case register under the case number M.10319.
Source: Mergers: Commission opens in-depth investigation (europa.eu)
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