London – The UK's Competition and Markets Authority is investigating Kingspan's proposed take-over of sandwich panel company Building Solutions.
The investigation comes as Kingspan failed to allay the Authority's fears that there could be too much concentration in the standard foam sandwich panel market.
Kingspan owns a number of other suppliers in the UK market. If the £37.5m ($ 45.6m) deal goes through unaltered, only Tata group and limited imports of the panels would offer competition, said the CMA.
Colin Rafferty is a senior director, mergers at the CMA. He said: 'Sales of foam sandwich panels in the UK amounted to about £200 m last year. They account for an important part of the construction costs faced by businesses and public bodies.
'Kingspan is by far the largest player in this market and this deal would involve it buying up one of its only two meaningful competitors. So, we’re concerned that the deal could damage competition, resulting in higher prices or lower quality products.'