Commission Investigates Greiner/Recticel Deal
The European Commission has opened an in-depth investigation to assess Greiner’s proposed acquisition of Recticel over concerns that the combined entity would reduce competition in the technical foams market. The polyester- or polyether-based flexible foams are used in a wide variety of applications in diverse industries, including the automotive, construction, household and clothing industries.
The Commission said its initial investigation identified a number of preliminary concerns about the transaction, especially with regard to reduced choice and higher prices for products such as technical foam rolls; foams for reducing noise, vibration, and harshness; and filter foams in a number of local European markets.
It added that Greiner decided not to submit commitments during the initial investigation to address preliminary concerns.
For each of these products, the merged entity would hold high combined market shares in already concentrated markets, in particular locally in central European countries such as Austria, Germany, Poland and the Czech Republic.
Greiner and Recticel are also one of very few suppliers that offer the full range of properties and specifications of technical foam and have an extensive geographic footprint. In particular, customers in the automotive industry often rely on the two companies because of their reputation, broad product portfolio and qualification by automotive original equipment manufacturers, the Commission added.
The Commission has until Apr. 8, 2022 to make a decision on the merger.
Recticel resists takeover
The management of Belgian polyurethane foams specialist Recticel has already rejected the takeover offer from Austrian group Greiner, saying it undervalues the company. Greiner made its unsolicited bid on May 14, but only made the move official on Oct. 6.
Subsequent to Greiner’s offer, Recticel initiated a strategic review, which resulted in the decision to separate its businesses and divest its engineered foams division. It then announced on Oct. 11 that it had received a binding offer for the engineered foams business from US competitor Carpenter, based on an enterprise value of €656 million.
Recticel investors will vote on the sale to Carpenter at an extraordinary general meeting on Dec. 6.
If the sale to Carpenter goes through, then Greiner could withdraw its offer as it is reported to be targeting the engineered foams business in particular.
Author: Elaine Burridge, Freelance Journalist
