BELGIUM – 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.

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 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.

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.