Hunter Douglas’s takeover of erfal – a manufacturer of window coverings – called off due to competition law concerns

On 11 April 2024 Hunter Douglas GmbH, Düsseldorf, withdrew its notification to acquire erfal GmbH & Co. KG, Falkenstein/Vogtland, due the Bundeskartellamt’s competition concerns.

The medium-sized target company erfal is a manufacturer of insect screens as well as of interior and exterior window coverings.

Hunter Douglas is a global manufacturer of systems used to produce interior window coverings. In many other countries (such as the Netherlands, the UK and Scandinavia), the company is already vertically integrated, producing systems and fabrics as well as made-to-measure interior window coverings, which are sold through specialist retailers and online. In Germany, Hunter Douglas has so far only sold systems and fabrics to manufacturers of made-to-measure products (fitters), such as erfal.

Andreas Mundt, President of the Bundeskartellamt: “Our investigation so far has shown that Hunter Douglas has a dominant position when it comes to systems for the production of interior window coverings, especially shades. The integration of a customer and a manufacturer at the level of the downstream market would have given Hunter Douglas the possibility and incentive to disadvantage its other customers in Germany competing with erfal in order to strengthen its own and erfal’s market position.”

Most of the market players surveyed were highly critical of the project. The investigation has shown that fitters in Germany purchase their systems almost exclusively from Hunter Douglas and do not consider the products offered by other suppliers to be suitable alternatives. Since switching to another supplier would therefore be difficult, customers would not have had sufficient possibilities to effectively limit Hunter Douglas’s market power and its scope of action resulting from this.

The Bundeskartellamt informed the companies of its competition concerns in October 2023 and gave them the opportunity to comment. Since then Hunter Douglas had proposed to address the authority’s competition concerns by selling a group-owned systems manufacturer. However, the proposed commitment to this effect was withdrawn by the company at the end of March.