The planned acquisition of Prokey AB by Assa Abloy AB means that Assa Abloy would gain a monopoly position in the wholesale services market for locksmiths. The Swedish Competition Authority is therefore taking the matter to court in order to stop the acquisition.
Assa Abloy is the dominant company within the Swedish lock sector. Assa Abloy owns the company Copiax, which is Prokey's only competitor in the wholesale services market for locksmiths. Should Assa Abloy acquire Prokey, Assa Abloy would gain a monopoly position.
"The competition between Copiax and Prokey means that locksmiths currently receive good service and competitive prices from these companies. A monopoly means that the incentives to compete disappear, which makes it likely that the companies' customers would get worse prices, service, delivery terms and product ranges after the acquisition. In the end, this would negatively affect consumers", says Dan Sjöblom, Director-General of the Swedish Competition Authority.
The Swedish Competition Authority regard Copiax and Prokey to be each other's closest competitors. When the competition between the two companies ends, Assa Abloy will have both the opportunity and the incentive to raise prices for Copiax and Prokey's costumers. For competing manufacturers, Assa Abloy's acquisition will entail worsened opportunities for competitors to sell through Copiax and Prokey. This means that Assa's dominance will become even greater, and that the range of competing lock products might decrease.
"Locksmiths are dependent on a well-functioning wholesale services market. Most locksmiths lack the option of turning to other wholesalers or directly to the manufacturers in order to buy the products which are needed to service their household and business clients. Not only does the acquisition give Assa Abloy a monopoly in the wholesale services market, but it also provides Assa with the opportunity to further strengthen its position within manufacturing, which is very detrimental to competition. The Swedish Competition Authority therefore demands that the deal shall be stopped", says Dan Sjöblom.
The Swedish Competition Authority has submitted a summons application to the Stockholm City Court demanding a prohibition of the acquisition.
For further information, please contact:
Per Karlsson, Head of Legal Department tel. +46 (0)76 542 15 56
Trine Osen Bergqvist, Legal Counsel, tel. +48 (0) 8-700 15 23
Martin Sutinen, Senior Economist, tel. +46 (0) 8-700 15 30