The Competition Authority has concluded that the merger of Ferro Zink ehf. and Metal ehf. hinders effective competition and must therefore be annulled.
Ferro Zink and Metal are among the few companies in the country that specialise in the import and sale of construction metals, with a wide range of metals in various sizes and types. Through this, both partners serve sheet metal, metal and mechanical workshops, as well as various industrial companies.
The Competition Authority's investigation reveals that the merger would create a dominant position in the stainless steel and aluminium markets, as well as increasing concentration and reducing the number of strong competitors in the markets for wrought metals. Furthermore, the merger would strengthen and consolidate Ferro Zink's monopoly position in the hot-dip galvanising market and increase the barriers to entry for new competitors.
The Competition Authority considers it likely that the merger will lead to higher prices and/or poorer service for business customers. It has not been demonstrated that the potential benefits of the merger would offset the harmful effects on the market or be passed on to consumers.
In light of the foregoing, the Competition Authority concludes that the merger substantially impairs competition and is therefore contrary to competition law.
Decision: „The acquisition of Metal Ltd. by Ferro Zink Ltd. constitutes a merger within the meaning of competition law. In view of the considerations set out in this decision and pursuant to Article 17(c) of the Competition Act No. 44/2005 The Competition Authority invalidates the merger.“
Further information on the decision of the Competition Authority can be found here.
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