Merger between roof tile manufacturers: Wienerberger can take over Terreal

The Bundeskartellamt has cleared plans by Wienerberger AG, Vienna, Austria, to acquire all shares in Terreal Holding S.A.S, Suresnes, France.

Andreas Mundt, President of the Bundeskartellamt: “As a result of the merger, the well-known roof tile brands “Creaton” and “Koramic” will be offered by one and the same company in the future. Wienerberger will become the largest provider of clay roof tiles in Germany. We have therefore examined the case in great detail. Ultimately, it became clear that sufficient competitive pressure will still be exerted by other companies, and consumers will still have sufficient alternatives to choose from even after the merger.”

Wienerberger and Terreal are international manufacturers of construction materials. In Germany, Terreal primarily carries out its activities through Creaton GmbH, Wertingen. The companies’ activities in Germany overlap particularly in the sector for so-called small-scale roofing materials for pitched roofs. Terreal/Creaton produces concrete roof tiles and clay roof tiles. Wienerberger, however, offers only clay roof tiles under the “Koramic” brand in Germany.

The extensive information gathered from competitors and buyers has shown that – in line with the authority’s previous decision practice – the market is to be defined as a market for small-scale roofing materials for pitched roofs which is national in scope and includes at least clay roof tiles and concrete roof tiles. The reason for this is that despite certain differences in terms of durability, quality and price, the degree of substitutability between these products is deemed to be high.

In the national market for small-scale roofing materials, the large enterprise BMI, which offers the “Braas” brand, will remain the leading company even after the merger. As a result of acquiring Terreal/Creaton, Wienerberger, which has so far had only moderate market shares, will become the second-largest provider followed by the medium-sized enterprises Nelskamp, Erlus and Jacobi/Walther. The authority’s investigations have furthermore shown that while the parties to the merger will become the strongest provider in the clay roof tiles sector, their joint market share will still be less than one third.

When assessing the merger project, the Bundeskartellamt also examined whether due to the limited number of market participants the merger would result in opportunities or incentives for the parties to restrict the competitive pressure among them as oligopolists. However, various structural characteristics of the market, such as the great variety of product models, only limited price transparency, the strong costumer side (building materials trading companies) and the companies’ actual competitive behaviour in the past years, suggest otherwise. In 2022, for example, the providers used very different ways to pass on to customers the enormous cost increases caused by the energy crisis. There are no indications that the merger will eliminate the existing competition, which is vital to the market.

The merger project was also notified to competition authorities in other countries, where it is still being assessed.

The Bundeskartellamt will soon publish a detailed summary of the case.