Ventilation deal could hike product prices for contractors

Officials at the Competition and Markets Authority are warning that contractors could face price rises for ventilation products.

The watchdog has completed an initial Phase 1 investigation after Lindab International AB’s purchase last October of HAS-Vent Holdings Limited raised competition concerns in relation to the supply of circular ducts and fittings.

Lindab is a ventilation company primarily active in the UK through subsidiaries Lindab Limited and Ductmann Limited which both manufacture and distribute ventilation system products, including circular ducts and fittings.

HAS-Vent is also active in the manufacture and distribution of ventilation system products, including circular ducts and fittings, in England and Wales.

The CMA has found that the deal combines the current market leader and second largest supplier of circular ducts and fittings, and that following the merger, the combined business would likely supply around half the market, with all other competitors being considerably smaller.

Having reviewed the evidence, including internal documents and evidence from customers and competitors, the CMA found that the companies compete closely to supply customers.

The resulting loss of a strong competitor could therefore increase prices for installers and contractors, and the overall costs in the building of commercial projects such as office spaces, schools and hospitals.

Sorcha O’Carroll, Senior Director for Mergers at the CMA, said: “We’re concerned this deal between Lindab and HAS-Vent may reduce competition in England and Wales, leading to higher prices for construction projects.

“It is now up to Lindab and HAS-Vent to offer solutions to our concerns, otherwise this case will proceed to a more in-depth Phase 2 investigation.”

Lindab and HAS-Vent now have five working days to offer solutions which fully resolve the CMA’s competition concerns, otherwise it will refer the deal to an in-depth Phase 2 investigation.

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