The European Commission has conditionally approved the acquisition of Armstrong World Industries’ ceilings business outside the Americas (“Armstrong”) by Knauf. Both companies are active in the production and supply of modular suspended ceilings.
Knauf and Armstrong are two of the main suppliers of modular suspended ceilings in Europe. Modular suspended ceilings allow for flexible access to the installations in the ceiling cavity and are widely used in the construction of non-residential buildings across Europe, such as offices, hospitals, or schools.
The Commission was concerned that the proposed acquisition would significantly reduce the level of competition in the markets:
- for mineral fibre tiles for modular suspended ceilings in Austria, Lithuania, Spain and the UK and
- for grids for modular suspended ceilings in Austria, Spain and the UK. These are the metal grid structures on which ceiling tiles are placed to form a modular suspended ceiling.
The merged entity would have been by far the largest supplier in each of those markets, with limited constraints from competitors. The Commission was concerned that the proposed acquisition would harm competition and lead to increased prices for commercial and public customers.
To address the Commission’s competition concerns, Knauf offered the following commitments:
- The divestment of Armstrong’s plants for the production of mineral fiber tiles and grids located in Team Valley, UK.
- The transfer of Armstrong’s sales teams and customer base in each of the countries where the Commission raised preliminary concerns (Austria, Lithuania, Spain, and the UK) and in additional countries to ensure the viability and competitiveness of the divestment business (Estonia, Germany, Ireland, Italy, Latvia, Portugal, and Turkey).
These commitments eliminate the Commission’s concerns in relation to the proposed acquisition. They remove the overlap between the companies’ activities in each of the national markets for which the Commission had concerns and ensure that the divestment business will be a viable competitor to the merged entity.
The Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in Austria, Spain, Lithuania, or the UK. The decision is conditional upon full compliance with the commitments.
Full Content: European Commission
