The European Commission has sent a Statement of Objections to Kingspan alleging that the company provided incorrect, incomplete and misleading information during the 2021 Commission's investigation under the EU Merger Regulation ('EUMR') of Kingspan's planned acquisition of Trimo. Kingspan ultimately abandoned the transaction.
In March 2021, Kingspan notified to the Commission its plan to acquire Trimo. Both companies are producers and distributors of mineral fibre sandwich panels. In April 2021, the Commission opened an in-depth investigation into the transaction. In March 2022, it issued a Statement of Objections outlining its concerns that the proposed transaction could negatively affect competition in certain building materials markets, leading to higher prices, reduced quality or less choice for customers. In April 2022, the parties abandoned the transaction.
The Statement of Objections
In November 2022, the Commission opened an investigation to determine whether Kingspan intentionally or negligently supplied incomplete, incorrect and/or misleading information during the Commission's investigation of Kingspan's proposed acquisition of Trimo.
In today's Statement of Objections, the Commission takes the preliminary view that Kingspan intentionally, or negligently, provided incorrect, incomplete and misleading information with respect to basic facts related to Kingspan's internal organisation, as well as basic facts aimed at assessing: (i) the scope of the relevant product and geographic market; (ii) the existence of barriers to entry and expansion; (iii) the importance of innovation; and (iv) the closeness of competition between Kingspan and Trimo, and vis-à-vis their competitors.
In the context of merger procedures, the parties have an obligation not to provide incorrect, incomplete or misleading information to the Commission, both when notifying a transaction and in reply to Commission's requests for information. Notifications and information requests are indeed the primary sources of information for the Commission's review of mergers and acquisitions. Their accuracy and completeness are therefore essential for an effective assessment.
If the Commission were to conclude that Kingspan intentionally, or negligently, provided incorrect, incomplete or misleading information, it could for each instance impose a fine of up to 1% of the company's annual worldwide turnover.
The sending a Statement of Objections does not prejudge the final outcome of the investigation. Kingspan has now the possibility to reply to the Commission's Statement of Objections.
Procedural background
A Statement of Objections is a formal step in an investigation by which the Commission informs the companies concerned, in writing, of the objections raised against them. The companies can then examine the documents in the Commission's file, reply in writing and request an oral hearing to present their comments on the case to representatives of the Commission and the national competition authorities.
Pursuant to Article 14(1) of the EUMR, the Commission may impose fines where intentionally or negligently merging parties supply incorrect, incomplete or misleading information when they notify a transaction to the Commission for merger review, and in response to requests for information made pursuant to Article 11(2) and Article 11(3) of the EUMR.
There is no legal deadline for the Commission to complete such inquiries. Their duration depends on a number of factors, including the complexity of the case, the extent to which the companies concerned co-operate with the Commission and the exercise of the rights of defence.
