This caught the attention of the CMA which launched a Phase 1 investigation which concluded that the deal “could leave the customers of the merging companies, usually building contractors, with few alternative suppliers to choose from” .
Kingspan is the UK’s leading supplier of standard foam sandwich panels commonly used as an insulating coating on commercial and industrial buildings.
Building Solutions also sells a range of specialty insulation and construction products through a variety of companies including Steadmans, Trimform, Advanced Cladding and United Roofing Products.
CMA said, “Kingspan and Building Solutions are two of the top three suppliers of standard foam sandwich panels in the UK and would only face serious competition from another British supplier – Tata Steel – after the ‘agreement.”
Colin Raftery, CMA senior director, said: “Foam sandwich panels are widely used in non-residential buildings in the UK, such as supermarket distribution centers, hospitals and police stations.
“Sales of foam sandwich panels in the UK amounted to around £ 200 million last year, so they represent a significant part of the construction costs borne by businesses and public bodies.
“Kingspan is by far the largest player in this market and this transaction would involve the purchase of one of its only two significant competitors. We are therefore concerned that the agreement may harm competition, resulting in higher prices or lower quality products. “
Kingspan and Building Solutions must now respond to CMA concerns within five working days.
If they are unable to do so, the agreement will be deferred for a full Phase 2 investigation.