Insulation industry news from Global Insulation

Europe: The European Commission (EC) has opened an in-depth investigation to assess whether the proposed acquisition by Mondi of two industrial packaging plants currently owned by Walki is in line with the EU Merger Regulation.

Mondi is a vertically integrated packaging and paper manufacturer that operates plants across Europe that manufacture extrusion coating products, such as those used for insulation production. The plants Mondi intends to buy from Walki also manufacture extrusion coating products. The EC has concerns that the removal of a key competitor may lead to less choice and higher prices for customers. The EC now has 90 working days, until 18 January 2016, to investigate whether these initial concerns are confirmed. The opening of an in-depth investigation does not prejudge the outcome of the investigation.

"The proposed merger could remove a key competitor for several types of packaging material. These are used in everyday items such as food packaging. I am concerned that the merger would lead to higher prices and less choice for these companies' clients and that the price increases could ultimately be passed on to consumers," said commissioner Margrethe Vestager, who is in charge of competition policy.

The EC's initial investigation has shown that the proposed acquisition of Walki's plants may remove a major competitive constraint on Mondi. Remaining competitors would have considerably lower production capacity than the merged entity and may not be able to match its product offering or proximity to key customers. The EC has concerns that these competitors may be unable to exert sufficient competitive constraint on the behaviour of the merged entity. This risks leading to a reduction of choice for customers and potentially to price increases for the products concerned.