European Commission to investigate Kronospan's proposed acquisition of Pfleiderer Polska; both are leading suppliers of wood-based panels in Europe and EC is concerned merger may reduce competition for supply of some panels in Poland, neighboring regions

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BRUSSELS , April 6, 2022 (press release) –

The European Commission has opened an in-depth investigation to assess the proposed acquisition of Pfleiderer Polska by Kronospan, under the EU Merger Regulation. The Commission is concerned that the merger may reduce competition for the supply of various types of woodboard panels in Poland and neighbouring regions.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Kronospan and Pfleiderer Polska are the largest suppliers of wood-based panels which are important inputs for kitchens and furniture. These markets are already consolidated, so we need to carefully assess whether the changes in the competitive landscape prompted by the proposed acquisition would lead to higher prices and less competition in this sector.”

Kronospan and Pfleiderer Polska are both leading suppliers of wood-based panels in Europe. Pfleiderer Polska is the Polish wood-based panel subsidiary of the Pfleiderer Group.

The Commission's preliminary competition concerns

The Commission's initial market investigation identified a number of preliminary concerns relating to the parties' strong market position in the supply of certain types of wood-based panels.

At this stage, the Commission has the following concerns:

The transaction may lead to higher prices and less choice for construction and industry customers as well as for end-consumers for particleboards, fibreboards and components. For each of these types of wood-based panels, the parties hold high combined market shares in several catchment areas around their production plants located in Eastern Europe, with limited or no credible alternative suppliers remaining following the transaction.
As a result of its combination with Pfleiderer Polska, Kronospan could engage in input foreclosure strategies with regards to particleboards, fibreboards and components.
The transaction may increase the likelihood of the parties being able to coordinate their behaviour.
The Commission will now carry out an in-depth investigation into the effects of the transaction to determine whether its initial competition concerns are confirmed.

The proposed transaction was notified to the Commission on 15 February 2022. Kronospan and Pfleiderer Polska decided not to submit commitments during the initial investigation to address the Commission's preliminary concerns. The Commission now has 90 working days, until 22 August 2022, to take a decision. The opening of an in-depth investigation does not prejudge the outcome of the investigation.

On 8 March 2022, the Polish competition authority requested that the Commission referred to it the assessment of the entirety of the proposed transaction. The Commission will continue to assess this request during its in-depth investigation and will work in close cooperation with the Polish competition authority to investigate its competitive concerns.

Companies and products

Kronospan is an Austrian manufacturer and supplier of wood-based panels and further value-added products. It is active worldwide with more than 40 manufacturing sites.

Pfleiderer Polska, headquartered in Poland, is a subsidiary of the Germany-based Pfleiderer Group. It focuses on the wood-based panels business and has three manufacturing lines in two production sites located in Grajewo and Wieruszow.

Merger control rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). In addition to the current transaction, there are two ongoing Phase II merger investigations: the proposed acquisition of Trimo by Kingspan and the proposed acquisition of GRAIL by Illumina.

According to Article 9(2)(a) of the EU Merger Regulation, the Commission may refer a transaction notified to it to the competent national competition authority, when a Member State requests such a referral because a transaction would threaten to significantly affect competition in a market within that Member State and that market presents all the characteristics of a distinct market.

More information will be available on the competition website, in the Commission's public case register under the case number M.10325.

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Dan Rivard
Dan Rivard
- VP Market Development -

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