The Bundeskartellamt has cleared plans by Schüco International KG, Bielefeld, (Schüco) to acquire 49 per cent of the shares in GEST – Holding Gesellschaft m.b.H, Hof bei Salzburg, Austria (GEST).

The product portfolio of the Schüco Group focuses on building systems made of aluminium, steel and PVC. The group develops and sells system solutions including window, door and façade systems in Germany and abroad. Behind GEST is the owner-managed company Stemeseder, which specialises in developing, manufacturing and selling aluminium profiles for hybrid windows made of wood-aluminium and, to a lesser extent, PVC-aluminium as well as for aluminium doors. Under the GS Perfect brand, Stemeseder also sells complementary products and modules for the window segment. Both companies are what is referred to as system suppliers for aluminium building systems.

Andreas Mundt, President of the Bundeskartellamt: “Our investigations have shown that Schüco is a dominant company in a Germany-wide overall market for aluminium building systems and in the submarkets for window, door and façade systems. Following intensive investigations, we nevertheless decided to clear the planned acquisition as it could not be established with sufficient certainty that Schüco’s competitive position in the relevant markets would be strengthened.  It is only in individual markets that the acquisition of Stemeseder will result in market share additions, and these additions are so minor that the market structure will remain practically unchanged.”  

The Bundeskartellamt’s market investigations in the context of this proceeding included a survey of over 200 customers and around 60 competitors in Germany and abroad. The investigations have shown that Schüco is already dominant in the Germany-wide overall market for aluminium building systems for aluminium-only applications and in possible relevant submarkets for window, door and façade systems. This is supported by the fact that Schüco has high market shares and a considerable market share lead over its closest competitors. Other factors are Schüco’s privileged access to the sales and procurement markets, its large product portfolio of aluminium building systems including accessories, its close and long-term business relationship with a large number of customers and, not least, its considerable financial strength compared with many of its current and potential competitors. The investigations have also shown that currently it cannot be expected that new competitors will enter the market in the relevant areas due to various barriers to entry, such as sales-related and customer-specific barriers, technical advantages of the companies currently active in the market, economies of scale and patent rights.

However, the Bundeskartellamt ultimately decided not to prohibit the acquisition. There is only a minor horizontal overlap in the two companies’ areas of activity. Stemeseder has no significant activities in the area of aluminium-only building systems. In this traditional business area of Schüco, the market share increase resulting from the acquisition of the target company and portfolio effects were not significant enough to allow the Bundeskartellamt to determine with sufficient certainty that the project would strengthen Schüco’s position to a degree relevant under merger control rules.

Up until the final decision was issued, Schüco had extensively objected to the Bundeskartellamt’s factual and legal reasoning set out in its clearance decision.