The Competition and Markets Authority (CMA) has launched an initial investigation into Kingspan’s proposed acquisition of steel cladding provider, Coverworld with concerns the deal could harm competition in the building and construction sector.
Announced this week, the CMA is currently gathering preliminary views and has issued an invitation to comment.
Kingspan provides insulation and building envelope solutions, while the £26.3 million turnover, £5.6 million operating profit firm, Coverworld, is known for its manufacture and supply of steel cladding systems.
The watchdog is assessing whether the anticipated acquisition could lead to a “relevant merger situation” under the Enterprise Act 2002.
Specifically, it is considering whether the transaction may result in a “substantial lessening of competition” in UK markets for goods or services.
Although a formal Phase 1 inquiry has not yet begun, the CMA’s early engagement signals regulatory scrutiny over potential market dominance or pricing effects stemming from the merger.
Any interested parties, including industry stakeholders and competitors, are encouraged to submit their comments on potential competition issues by the 9 July deadline.
Further updates, including the timeline for a formal Phase 1 investigation, will be posted on the CMA’s case page in due course.
A similar investigation into Kingspan’s planned acquisition of SIG building solutions, a design and supplier of structural and cladding systems, was brought against the company in 2020 by the CMA over higher prices or lower quality products as only one of three and potentially then two companies.
However the merger fell through due to the financial implications of an extended deal process at the time.
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