Brussels, 19/09/2007 (Agence Europe) - On 19 September, the European Commission cleared the planned acquisition of part of the raw and coated particle board business of Constantia Industries AG of Austria by Kronospan Holding GmbH of Germany, a member of the Kronospan Group. Both companies are active in the manufacture and supply of wood-based products, in particular raw and coated particle board, and decorative laminates and components, all used in the furniture industry. The Commission's in-depth investigation revealed that the concentration, as initially notified, would have led to a substantial impediment of effective competition in the raw particle board sector. To address the Commission's concerns, the parties have modified the proposed transaction, which enabled the Commission to give
the go-ahead.
The Commission's market investigation indicated that customers in Austria, Hungary, Slovakia and Romania would have had only limited possibilities to switch suppliers and that the main suppliers would not have had significant spare capacity to increase supplies in the affected area. Expanding capacity would need a considerable investment and a significant lead time. Although some capacity is expected to come on stream in the affected area over the next two years, notably from the new facility of Egger, a competitor, in Romania, and from a new Kronospan facility in Slovakia, this additional capacity would barely be sufficient to meet the increasing demand for raw particle board in the Commission's view. It comments that 'in the form originally notified, the transaction would have removed Constantia's raw particle board business, in particular the Austrian company Fundermax, as an important independent competitor in the affected area'.
With a view to removing these concerns, the parties modified the proposed transaction so that Kronospan would acquire only two of the three companies originally targeted, namely the German company Sprela and the Hungarian company Falco, whereas Fundermax would remain with Constantia. Kronospan also made the commitment not to acquire Fundermax for a certain period of time.
The Commission therefore decided that the modification of the transaction and the commitment by Kronospan were sufficient to remove the serious doubts concerning the concentration's compatibility with the single market. The Commission's decision to approve the modified concentration is conditional upon full compliance with Kronospan's commitment. (ol)