Timber industry: EU Commission against merger – salzburg.ORF.at
economy
The EU Commission has doubts about the takeover of the Polish subsidiary of the German Pfleiderer Group by the Salzburg chipboard producer Kronospan. This belongs to the Kaindl Group. According to the commission, an investigation has been initiated.
The EU competition authority fears that competition between suppliers of wood-based panels in Poland and neighboring regions will be strained.
“Kronospan and Pfleiderer Polska are the largest suppliers of wood-based panels, which are important pre-products for kitchens and furniture. As these markets are already consolidated, we need to specifically assess whether the changes in the competitive landscape triggered by the proposed acquisition would lead to higher prices and less competition in this industry,” said Margrethe Vestager, the Commission’s Executive Vice-President in charge of competition policy .
Higher prices through new market power?
The EU Commission fears that the planned merger could result in higher prices and a smaller selection of chipboard, fibreboard and components for construction and industrial customers as well as for end consumers.
Post-merger, the parties would have high combined market shares for each of these types of wood-based panels in several catchment areas of their production sites in Eastern Europe and few or no credible alternative suppliers would emerge.
The EU Commission also fears collusion between Pfleiderer and Kronospan after the takeover. The project was notified to the Commission for approval on February 15, 2022.
According to the EU Commission, Kronospan and Pfleiderer Polska have not made any commitments to address the concerns. They now have 90 working days to issue a decision, delayed to August 22, 2022.