EU competition authority raises concerns about the proposed concentration of production capacities and its effects on competition in the EU market for extrusion coated wrapping materials.
The European Commission (EC) has opened an in-depth investigation into the acquisition of parts of Walki's industrial packaging division by Mondi. According to the EC, there is an initial concern that the proposed transaction could remove a key competitor from the wrapping materials market, resulting in higher prices and less choice for clients and consumers.
Last May, Walki Group has entered an agreement with Mondi Group to sell its Pietarsaari facility in Finland and the Wroclaw facility in Poland. The two mills constitute the major part of Walki's Industrial Packaging business, producing primarily packaging material for the paper industry as well as for the corrugated board industry.
The plants Mondi intends to buy from Walki also manufacture extrusion coating products. "The EC has concerns that the removal of a key competitor may lead to less choice and ultimately higher prices for customers of wrapping materials which also serve as moisture barriers, used, for example, in the paper industry or in boxes for fresh food products," the EC explained in the yesterday's press release.
The Commission has now time until 18 January next year to investigate whether these initial concerns are confirmed.