The CMA has accepted a remedy from Carpenter and
US-based Carpenter agreed to buy Belgian firm
Following an initial Phase 1 investigation, the Competition and Markets Authority (CMA) identified competition concerns in 3 foam-related markets in the
At the outset of the Phase 2 investigation, Carpenter and
The CMA accepted the businesses' request and consulted, in September, on the merging business' proposal to sell the majority of the
The CMA's final report confirms that the deal could reduce competition. This means that, without remedies to restore this loss of competition, the deal could have damaged the competitiveness of
The CMA has also concluded that, with minor modifications, the remedy proposed by the merging businesses will fully replace the loss of competition arising from the merger. This means that Carpenter will now be required to sell the majority of the
The CMA's decision today brings the case to a close well ahead of the
Having completed a thorough review of the evidence over 2 months ahead of the statutory deadline, we have confirmed our provisional conclusion that the merger could reduce competition in certain foam markets.
Requiring Carpenter to sell most of the
For more information, visit the Carpenter /
Notes to editors
Under the Enterprise Act 2002 the CMA has a duty to make a reference to Phase 2 if the CMA believes that it is or may be the case that a relevant merger situation has been created, or arrangements are in progress or contemplation which, if carried into effect, will result in the creation of a relevant merger situation; and the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition (SLC) within any market or markets in the
The process that applies where merging parties request to concede a substantial lessening of competition is set out in paragraphs 7.18 to 7.21 of CMA2 revised.
In addition to conceding that the deal raises competition concerns, the firms agreed to waive their right to challenge this position during the CMA's Phase 2 investigation and also submitted a proposed remedy to address the concerns identified.
The CMA introduced a mechanism to 'concede' an SLC in the revised version of CMA2 revised introduced in
The CMA found that, if the deal went ahead, the combined companies would face limited competition in the
The CMA asked for views on the remedy offered by
The CMA concluded that the divestiture under the Parties' Remedy Proposal to a suitable upfront purchaser, who has sufficient R&D capabilities and chemical procurement experience, would be effective and proportionate in addressing the SLCs and the resulting adverse effects.
For media enquiries, contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.
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(C) 2022 M2 COMMUNICATIONS, source