Assa Abloy AB’s planned takeover of wholesaler Copiax AB would create a monopoly situation and should therefore be prohibited, says the Swedish Competition Authority. The agency is seeking a court order to halt the purchase.
Assa Abloy is the dominant manufacturer of locks and hardware. Via a subsidiary, it is also active in the wholesale market for the sale of such products to locksmiths in Sweden. Copiax is also active in this market. If the takeover were to go through, Assa Abloy would have a monopoly on the wholesale market for locks, argues the Competition Authority following a review of the planned transaction. Accordingly, the agency has filed a summons application with the Stockholm City Court aimed at prohibiting the transaction.
“For consumers and businesses, properly working markets are essential,” says the Competition Authority’s Acting Director General, Jan-Erik Ljusberg. “If Assa Abloy’s planned takeover of Copiax goes through, this will have an anti-competitive impact and affect customers directly.”
As a monopolist, Assa Abloy would be in a position to dictate less favourable terms and downgrade its service levels and product range, to the detriment of both locksmiths and consumers. Assa Abloy would also be able to make it harder for competitors to bring their products onto the wholesale market in Sweden.
“Most locksmiths are small businesses and are therefore dependent on an efficient wholesale process,” says Jan-Erik Ljusberg. “Also, they lack buying power vis-à-vis a monopoly, and ultimately the consumers will bear the cost if the present competitive situation comes to an end. This is why we want to prevent the takeover.”
Under the Swedish competition rules, planned mergers of a certain magnitude have to be notified to the Competition Authority. If the agency finds that a merger is incompatible with the law, it applies to the Stockholm City Court for a summons. The court can then prohibit the transaction.
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Jimmy Dominius, Press Officer, tel +46 8-700 15 80 or +46 73-773 15 80
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Christian Berger, Senior Case Officer, tel +46 73-773 16 55