The Finnish Competition and Consumer Authority (FCCA) has on 7 February 2019 approved, subject to conditions, the transaction where Parma Oy acquires AS TMB. The approval is conditional upon Parma selling the business operations of its Nastola plant.
On 10 August 2018, the FCCA was notified of an arrangement whereby Parma Oy would acquire AS TMB. Parma manufactures and sells concrete elements in Finland. Parma also provides its customers with design, assembly and transportation for precast concrete. Parma is part of the Consolis Group, engaged in the design, manufacture and production of precast concrete in 22 countries.
AS TMB is the parent company of TMB Group, involved in the manufacture, design and installation of concrete elements. TMB Group operates in the Baltic states, Scandinavia and Finland; the Group’s local subsidiary in Finland is Betonimestarit Oy. Betonimestarit Oy produces concrete framework elements, slabs and wall elements, in addition to which the company’s product range includes infraproducts.
The FCCA referred the transaction to further processing on 7 September 2018, because based on the FCCA’s preliminary assessment, the acquisition raised concerns that the transaction could restrict competition on the market segment of several precast concrete products. The Market Court extended the deadline for the proceedings on the merger until 7 February 2019. The FCCA applied for the extension at Parma’s request.
Sale of Nastola operations eliminates competition problems
The FCCA’s investigation shows that the market share of the resulting cluster in terms of both sales volume and production capacity will become remarkably high on the market sector of several precast concrete products. Competitors’ reactions on the capacity-limited market would not be sufficient to offset the price increase pressures resulting from the acquisition; instead, competition in the market for hollow core slabs, prestressed beams and columns and reinforced concrete beams and columns will be essentially suppressed. Therefore the transaction cannot be approved without conditions imposed to offset its impact.
To eliminate the obstacles to competition resulting from the transaction, Parma agrees to sell off the business operations of the Parma plant in Nastola to a buyer with the capacity to function as an active competitor in the same market. The sale of the Nastola plant will prevent the suppression of competition resulting from the acquisition in the market for precast concrete for elements, which has been found to be problematic.
The FCCA’s decision includes business secrets of the parties involved. The decision cannot be published until the business secrets have been removed.
Further information:
Senior Research Officer Anu Ala-Outinen, tel. +358 (0)29 505 3010
Assistant Director Sanna Syrjälä, tel. +358 (0)29 505 3385
firstname.lastname@kkv.fi
According to the Competition Act, the FCCA must be notified of a transaction if the combined turnover of the parties to the corporate transaction exceeds 350 million euros and the turnover from Finland of at least two of the parties exceeds 20 million euros for both. The FCCA will approve a corporate transaction if it has none of the harmful impacts referred to in the Competition Act. The FCCA will intervene in corporate transactions if its investigations suggest that the acquisition substantially impedes effective competition on Finnish markets or a substantial part of the markets, particularly through the creation or reinforcement of a dominant market position. Where necessary, notifications of acquisitions are considered in two stages. The so-called first stage takes a month at most. If the acquisition is clearly not harmful to competition, or if the harmful effects can be prevented by means proposed by the parties to the acquisition, the acquisition is approved during the first stage. If not, the FCCA decides to conduct a further investigation of the matter, during which the acquisition and its competition effects are investigated in further detail.
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