The Competition and Markets Authority (CMA) has approved the anticipated acquisition by Kingspan Group of steel cladding supplier Coverworld.
The UK watchdog launched a merger inquiry at the beginning of July to investigate the transaction and called for comments on the potential impact to competitors.
Today (7 August), the CMA published its decision clearing the deal, with the full text of the decision expected soon.
Coverworld is a Chesterfield-based producer and supplier of single and twin-skin coated steel cladding systems.
Its most recent accounts for the year ending 30 June 2024 showed a turnover of £26.31m, a decrease of 17% from the previous year, which the directors blamed mainly on declining global steel prices.
In 2020, the CMA launched an investigation into Kingspan’s plan to buy the insulation business of building material company SIG for £37.5m. The probe was closed following the deal’s collapse after the companies were unable to agree on revised commercial terms.
Kingspan is one of the manufacturers heavily criticised in the Grenfell Tower Inquiry’s final report.
Although only 5% of Kingspan’s Kooltherm K15 insulation product was used in Grenfell Tower, the Inquiry concluded that the company engaged in dishonest and misleading marketing and “knowingly created a false market in insulation” from 2005 onwards for use on buildings over 18m tall.
In response to the Inquiry’s report, Kingspan said that it “has long acknowledged the wholly unacceptable historical failings that occurred in part of our UK insulation business” but added that “[w]hile deeply regrettable, they were not found to be causative of the tragedy”.
A Cabinet Office investigation launched earlier this year into the seven companies criticised by the Inquiry, including Kingspan, for a potential ban from public sector contracts was paused in July “to prevent any impact on criminal investigations”.
Kingspan reported a group revenue of €8.6bn (£7.31bn) for the year ending 31 December 2024, a 6% increase from the previous year.
