The Danish Competition Council has approved STARK Danmark’s acquisition of sole control of Jens Schultz A/S

STARK is a subsidiary in STARK Group A/S, which is ultimately owned by the capital fund Lone Star. During the DCCA’s merger procedure it was announced that STARK Group A/S, including STARK, had been sold to CVC Capital Partners Fund III. The acquisition is expected to be concluded in the second quarter of 2021 and is according to STARK subject to merger approval of the European Commission.

STARK is active within retail sales of building materials to both professional and private customers from builders merchants located throughout Denmark.

Jens Schultz is also active within retail sales of building materials to professional and private customers from four local builders merchants in Svendborg, on Langeland and Ærø.

Consequently, STARK and Jens Schultz are both active on the markets for retail sale of building materials to professional and private customers, respectively, with overlapping activities in the South of Funen.

Mergers with horizontal overlaps may potentially significantly impede effective competition through unilateral effects. The DCCA concluded, that the merger did not have a significant impact on competition at national level. However, the DCCA also carried out extensive investigations of potential local effects of the merger and concluded that STARK and Jens Schultz exerted competitive pressure on each other in Svendborg and Rudkøbing (Langeland).

This competitive pressure between the two competitors would disappear as a result of the merger which would lead to an incentive for STARK to raise prices and/or reduce the service level in the two above-mentioned local areas.

However, there are specific aspects in this merger case which counteract STARK’s possibility - and incentive - to raise prices and/or reduce the service level as a result of the merger. The DCCA’s investigation has shown that the potential competition would be sufficient to counteract the potential impediment of effective competition caused by the merger.

Overall, the DCCA concluded that the merger would not significantly impede effective competition on the markets for retail sale of building materials to professional and private customers on a national level or on a local level.

On 24 February 2021, the Danish Competition Council approved the merger.