SIG has abandoned its proposed deal with Kingspan, as the Competition and Markets Authority (CMA) confirms it will cancel its Phase 2 merger investigation into the takeover
Building material supply provider SIG has halted plans to sell its insulated wall, roof panel and profiled metal cladding company to rival Kingspan for £37.5m.
The sale of the Building Solutions divisions was announced last October by SIG as part of its restructuring.
The deal caught the eye of the CMA who launched an investigation.
Kingspan is the leading provider in the UK of standard foam sandwich panels, which are commonly used as insulated cladding on commercial and industrial buildings such as large waste facilities.
Building Solutions also sells a range of insulation and specialist construction products through a variety of businesses, including steadmans, trimform, advanced cladding and united roofing products.
After completing its initial Phase 1 investigation in April 2020, the CMA found that the proposed deal could result in customers facing higher prices or lower quality products.
It found that Kingspan and Building Solutions are two of only three key suppliers of standard foam sandwich panels in the UK and would only face serious competition from Tata Steel after the deal.
Competition from suppliers of products imported from outside the UK and suppliers of other products sometimes used as insulated cladding is also extremely limited.
The CMA had moved to an in-depth, ‘Phase 2’, review after its concerns were not addressed by the firms.
Kingspan and Building Solutions have now decided to abandon the deal and so the CMA will be cancelling its investigation.
SIG said: “As a result of the prevailing market conditions, it has not been possible for the company and Kingspan to agree commercial terms for the extension of the agreement.
“Accordingly, the parties have agreed to terminate the agreement with immediate effect and the disposal therefore will not proceed.
“The company is currently reviewing a number of options regarding the Building Solutions business and will provide further updates when appropriate.”