Finland moves to block Uponor-KWH pipe deal

By Richard Higgs
EUROPEAN PLASTICS NEWS

Published: March 20, 2013 8:44 am ET
Updated: March 20, 2013 8:48 am ET

Related to this story

Topics Mergers & Acquisitions, Construction, Extrusion, Pipe/Profile/Tubing

VANTAA, FINLAND — Finland's antitrust authority has moved to block a plan by two Finnish plastic pipe manufacturers Uponor and KWH Group to merge their pipe infrastructure businesses.

Last September, the two groups announced they intend to consolidate the operations of subsidiaries KWH Pipe Ltd and Uponor Infrastructure Solutions in a new joint venture called Uponor Infra Oy. They said the consolidation was prompted by intense competition and falling demand resulting from the prolonged global economic crisis.

The Finnish Competition and Consumer Authority (FCCA) has decided the merger should be prohibited. The body argued that it would bring together the country's "two overwhelmingly largest suppliers of plastic pipe systems", reducing competition significantly in the infrastructure pipe market.

FCCA said the move is likely to result in increased pipe prices and raise infrastructure building costs. It had little choice but to oppose the merger as the two companies had offered no proposal mitigating its effect on competition, the authority declared.

Under Finland's Competition legislation the FCCA decision must be referred to the Market Court, a special court that hears market law, competition and public procurement cases. The court can prohibit or approve the merger or impose conditions on its go-ahead.

Uponor and KWH groups stated that they would support their case at the Market Court and still intend to continue with the merger plan. The court has until 25 May 2013 to reach a decision in the case.

Under the plan, Uponor would own a majority 55.3 percent stake and KWH Group would have a 44.7 percent share in the joint venture which would focus on supplying infrastructure pipe systems mainly to northern Europe.

The firms' infrastructure businesses produce pipe used to convey rainwater, sewage, pressurised water and cable systems for construction and municipal authority customers.

The proposal would also see Uponor acquire the crosslinked polyethylene (PEX) pipe production operations of Ulvila-based KWH Pipe which would be integrated with Uponor's building solutions organization.

The partnership between Vaasa, Finland-based KWH and Uponor of Vantaa, Finland want to benefit from increased efficiency and economies of scale as a result of the merger.


Comments

Finland moves to block Uponor-KWH pipe deal

By Richard Higgs
EUROPEAN PLASTICS NEWS

Published: March 20, 2013 8:44 am ET
Updated: March 20, 2013 8:48 am ET

Post Your Comments


Back to story


More stories

Image

Impact-resistant window maker buys competitor for $111 million

July 31, 2014 3:07 pm ET

PGT Inc. is acquiring CGI Windows & Doors Holdings Inc. for $111 million as part of a plan to grow strategically by buying businesses with...    More

Buyer plans to sell former Hoover molding, assembly plants

July 31, 2014 2:06 pm ET

A former Hoover manufacturing plant with 150 injection machines in El Paso, Texas, and a nearby maquiladora plant in Juarez, Mexico, changed owners...    More

Private equity firm buys majority share of truck accessory maker

July 31, 2014 10:30 am ET

A majority share of Ann Arbor, Mich.-based truck accessory manufacturer Tectum Holdings Inc. has been acquired by Boston-based private equity firm TA ...    More

Image

Residential construction set for steady growth

July 31, 2014 10:27 am ET

After a sluggish start to the year, activity levels in the residential construction sector gained momentum in the second quarter of this year. The...    More

Image

Castle Harlan buys landscape erosion control firm Tensar

July 30, 2014 3:46 pm ET

Private equity group Castle Harlan inc. has acquired Atlanta-based Tensar Corp., with plans for the geosynthetic products maker and its subsidiaries t...    More

Market Reports

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events