Kingspan disputes EU finding it gave ‘misleading’ information on planned merger

The insulation giant, which has its headquarters in Cavan, is facing a fine of up to 1pc of its annual worldwide turnover if the final outcome of the EU investigation stays the same. Last year Kingspan reported revenues of €8.1bn.

Yesterday the Commission sent a statement of objections to the Irish company alleging that it provided misleading information during a 2021 investigation into its planned acquisition of Trimo, a Slovenian competitor which also supplied insulation panels to the construction industry. Kingspan later abandoned the transaction.

In March 2022, the Commission expressed concerns that the merger could have a negative effect on competition in some building-materials markets, leading to higher prices or less choice for customers.

The Commission says it has now taken the preliminary view that Kingspan either intentionally or negligently provided incorrect, incomplete and misleading information with respect to basic facts about its internal organisation.

The Irish company is also alleged to have given incorrect or incomplete information about the scope of the relevant product and geographic market, the existence of barriers to entry and expansion, and the closeness of competition between it and Trimo.

If this were to be the final conclusion of the investigation, Kingspan could be fined up to 1pc of its turnover for each instance. The Commission said that sending a statement of objections does not prejudge the final outcome, and pointed out that Kingspan can now respond formally to the claims.

Margrethe Vestager, the Commission’s executive vice-president in charge of competition policy, said: “Companies must supply accurate and complete information during our merger investigations. This is essential for merger reviews to remain both speedy and effective. In this case we are concerned that Kingspan may have provided incorrect, incomplete and misleading information during our review of its acquisition of Trimo.”

In a statement, Kingspan said that while it does not agree with the preliminary conclusions, it will reflect carefully on them and work with its lawyers in formulating a response.

“Kingspan has fully co-operated with the Commission throughout the period relating to the Trimo process, which commenced in September 2020, continued until Kingspan withdrew from the process in April 2022, and was followed by the EU Commission’s investigation which opened in November 2022,” it said.

“This Trimo application was unusual and uniquely onerous given both the level of information sought and the fact that the process occurred during Covid. It is in no way representative of the long and productive relationship that Kingspan has with the European Commission.

“Since the Trimo process began in 2020, Kingspan has secured four successful clearances, supporting investments by Kingspan in energy-efficient and low-carbon buildings that are essential to the European Commission’s Green Transition.”

The company added that it had always made its best endeavours to provide the Commission with all the information it required in a timely and complete fashion and would continue to do so. It looked forward to “continued positive co-operation with the Commission into the future”.

There is no legal deadline by which the Commission has to complete its inquiry. Its statement says that the duration depends on a number of factors, including the complexity of the case, the extent to which the companies concerned co-operate, and the exercise of the rights of defence.

In April 2022, the Belgian insulation materials company Recticel announced it had acquired Trimo for an estimated €164.3m. The Slovenian company, which employed about 480 people and had net annual sales of €138.5m at the time, had been owned by Innova Capital.