Provided the transaction takes place, TechnoNICOL will become the dominant company in the stone wool market of the Central Federal District and the North-West Federal District of Russia.
The Federal Antimonopoly Service (FAS) granted the petition of Invest-Krovlia LLC, affiliated with TechnoNiCOL, to acquire 100% of the voting shares of Belgorod non-standard equipment and hardware factory ‘Zavod Nestandartnogo Oborudovaniya I Metalloizdeliy’, which produces basalt thermal and sound insulation materials under the trademark of IZOVOL.
Conducted by the FAS an analysis of the competitive situation in the stone wool market demonstrated that in case if the transaction takes place, the share of economic entities belonging to Invest-Krovlia LLC group will exceed 50% in the stone wool market of the Central and the North-West Federal Districts. Such an entity is recognized a dominant market player.
However, the transaction was considered to be permissible, taking into account the obligations undertaken by Invest-Krovlia LLC, specifically, not to hinder competition in the mineral wool market, to upgrade production and to raise the competitive capacity of products in the Russian and global markets.
The first petition to acquire Izovol was received by the FAS on December 28, 2016. “Yes, our transaction is being harmonized in the FAS Russia, but until the approval is received, no changes will be made to the company,” commented Oleg Izotov, Director General of Izovol. But based on the Federal Law ‘On Protection of Competition’, the Antimonopoly Service refused to approve the transaction in March 2017.
A further petition was forwarded to the FAS in July 2017 and, as we see, it received approval provided that the conditions are met.