UK Probes Lindab’s Acquisition of HAS-Vent Amid Fears of Market Monopoly

The Competition and Markets Authority (CMA) has initiated an investigation into Lindab’s acquisition of Birmingham-based HAS-Vent. The inquiry, launched in November, stems from apprehensions that the merger could potentially stifle competition, leading to increased prices for contractors and escalating costs in construction projects across England and Wales.

The CMA, after careful scrutiny, has determined that the amalgamation of these two major circular duct suppliers might result in higher prices for vital construction components, affecting the affordability of building endeavors such as offices, schools, and hospitals. Sorcha O’Carroll, the senior director for mergers at the CMA, expressed concerns about the potential ramifications of the deal, emphasizing the importance of preserving a competitive landscape in the industry.

“We’re concerned this deal between Lindab and HAS-Vent may reduce competition in England and Wales, leading to higher prices for construction projects,” stated O’Carroll.

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The investigation revealed that Lindab and HAS-Vent, both significant players in the manufacturing and distribution of ventilation products, could collectively control half of the circular ducts and fittings market in England and Wales if the merger progresses. Alarmingly, feedback from various industry competitors echoed the regulator’s concerns, highlighting widespread apprehension about the merger’s impact on competition dynamics.

According to regulatory protocols, Lindab and HAS-Vent are afforded a window until the impending Friday deadline (3 May) to propose potential concessions to address the CMA’s apprehensions. Failure to provide satisfactory solutions could prompt the regulator to initiate a more thorough phase two investigation, intensifying scrutiny into the merger’s potential implications on market competition.

Responding to the ongoing inquiry, a spokesperson for Lindab expressed disappointment regarding the need for a phase two investigation but reiterated the company’s commitment to cooperating fully with the CMA’s inquiries. They also maintained optimism that the investigation would ultimately affirm the market’s competitive nature and dispel concerns regarding the merger’s adverse effects on competition.

“The CMA investigation for circular ducts and fittings in England/Wales is now moving into phase two. We have cooperated fully with CMA during phase 1 and are, of course, disappointed that a phase two is needed,” the Lindab spokesperson remarked. “At the same time, we are welcoming a continued investigation by CMA, as we believe that the investigation will show that the market is fully competitive and the acquisition will not harm competition.”

Source: Construction News