The UK Competition Commission (CC) has accepted undertakings from Knauf Insulation Limited and its parent company, German-based Gebruder Knauf Verwaltungsgesellschaft KG (Knauf KG), which prohibit the…
The UK Competition Commission (CC) has accepted undertakings from Knauf Insulation Limited and its parent company, German-based Gebruder Knauf Verwaltungsgesellschaft KG (Knauf KG), which prohibit the proposed acquisition by Knauf of Scottish firm Superglass Insulation Limited. Knauf“s proposed acquisition of Superglass was referred to the CC by the Office of Fair Trading on 17 June 2004. Following an inquiry, the CC concluded that the proposed acquisition would result in a substantial reduction of competition in the markets for the supply of glass wool for loft insulation and blowing wool for cavity wall insulation. In its final report published November 2004, the CC concluded that the merger would remove an independent competitor from a market which is already highly concentrated. In addition to its large market share, the merged company would also have a strong grip on the available production capacity, which would enable it to exert a controlling influence over prices and lead to customers paying higher prices. After considering alternatives, the CC concluded that prohibiting the merger was the only effective remedy to the substantial reduction of competition it had identified. By accepting the undertakings, the Commission binds Knauf and its parent company Knauf KG to refrain from acquiring any interest in Superglass directly or indirectly, or any assets in Superglass other than in the ordinary course of business.