黑洞社区

SIG has pulled the plug on plans to sell its insulation panels business to Kingspan for 拢37.5m 鈥� saying a regulatory investigation into the move had helped sink the deal.

The firm announced it had agreed a price with its rival last October for its 黑洞社区 Solutions business.

But the move attracted the interest of the Competition & Markets Authority which last month said it had escalated the proposed move to a phase 2 investigation.

According to CMA guidance, a phase 2 investigation can take up to 24 weeks.

It adds: 鈥淎t Phase 2, a CMA panel of independent Members conducts an in-depth investigation to assess if a merger is expected to result in an SLC [substantial lessening of competition]. If an SLC is expected, the CMA decides upon the remedies required. Such remedies may include prohibiting the merger or requiring the divestiture (sale) of parts of the business.鈥�

But this morning SIG said it and Kingspan had now abandoned plans because the pair had not been able to extend the sale and purchase agreement which runs out on 7 July.

The CMA probe is not due to report until October and SIG said: 鈥淎ccordingly the date in the agreement would need to be extended in order for the Phase 2 investigation to be carried out. As a result of the prevailing market conditions, it has not been possible for [SIG] and Kingspan to agree commercial terms for the extension of the agreement.鈥�

Cenkos analyst Kevin Cammack said: 鈥淥ne can only assume that either Kingspan believes unacceptable concessions would be needed to obtain CMA approval or its current valuation of the business has shifted sufficiently to a level that is unpalatable for SIG.鈥�

SIG said the pair had agreed to terminate the deal and added that it was now reviewing its options for the business.