Having carried out an in-depth Phase 2 merger inquiry, the Competition and Markets Authority (CMA) has ordered Lindab – a supplier of circular ducts and fittings used in ventilation systems in buildings – to sell two sites after finding its deal with HAS-Vent could lead to reduced choice and higher prices for installers of ventilation systems in both Nottingham and Stoke-on-Trent.
The independent CMA group leading the inquiry scrutinised a wide range of evidence, including the parties’ internal documents and evidence from installers of ventilation systems and other suppliers of circular ducts and fittings. Based on this evidence, the group found that competition for these products occurs at a local level.
Having assessed the impact of the deal in various local areas, and then consulted on its provisional findings published in August, the inquiry group has concluded the deal has resulted in a substantial lessening of competition in the supply of circular ducts and fittings in the local areas centred around Nottingham and Stoke-on-Trent.
To resolve the loss of competition, the CMA is requiring Lindab to sell one site in each of the impacted areas. To ensure the largest pool of potential purchasers and given the different operating models in the industry (which means that some purchasers may want a site with manufacturing assets, while others may not), Lindab is required to market for sale all four sites it owns in the two areas and put forward potential buyers for the CMA to approve.
Kirstin Baker, Chair of the independent inquiry group, said: “Circular ventilation ducts and fittings are essential components in the construction of buildings, such as new offices and flats.
“Our investigation found this deal – by removing one of two main suppliers of these products in the Nottingham and Stoke areas – risked installers and developers having to pay more for these products.
“As a result, we are requiring Lindab to sell one site in each of the two areas, which should ensure local installers and businesses can benefit from effective competition.”
