Bundeskartellamt prohibits Xella from acquiring Danish aerated concrete manufacturer H+H

The Bundeskartellamt has prohibited the acquisition of the Danish aerated concrete manufacturer, H+H International A/S, by the market leader Xella International Holdings S.à.r.l., Luxemburg. As a result of the merger Xella would have gained a dominant position on the two regional markets for aerated concrete in northern and western Germany.

Andreas Mundt, President of the Bundeskartellamt, stated: "For many years Xella has been by far the market leader in Germany in the aerated concrete markets affected by this merger. In H+H it planned to acquire its closest competitor in the northern and western German markets. It was necessary to prohibit the acquisition to prevent a permanent restriction of competition in this sector."

Xella, a building materials supplier active in 30 countries with a turnover of approx. € 1.1 billion, is market leader in the manufacture and supply of aerated concrete and calcium silicate bricks and has production sites throughout Germany. The company is well-known for its brand "Ytong". H+H is active in 14 countries and mainly manufactures aerated concrete blocks. With its two production sites in Wittenborn and Hamm, the company is Xella's major competitor in the northern and western German markets for aerated concrete. Due to the high transport costs, aerated concrete is only sold regionally within a certain radius of the production sites. The combined market share of the two companies in the aerated concrete sector in the northern regional market is approx. 60% and in the western regional market over 40%. Their next closest competitors are significantly smaller, mainly medium-sized family-owned companies.

Due to the large differences in prices, technical features and long-established regional building traditions, aerated concrete blocks are not interchangeable (from a competition point of view) with other masonry units such as calcium silicate bricks or clay bricks. Even if all types of masonry units were included in the relevant market, Xella's competitive position would be so strong and its lead over its closest competitors so substantial that the acquisition would have to be prohibited in any case. The commitments offered by Xella during the proceedings to avoid the prohibition were insufficient.

The decision, which will shortly be available from the Bundeskartellamt's website, is not yet final. The companies have a month to appeal the decision to the Düsseldorf Higher Regional Court.