Aug 8 2005
Gypsum Today is reporting that the French building materials giant Saint-Gobain may face market abuse allegations that could delay or derail its takeover attempt of London based BPB.
Some of BPB's biggest British customers are to ask the Office of Fair Trading (OFT) to investigate the proposed deal. They say they could be seriously disadvantaged if BPB was bought by Saint-Gobain. The French company already owns a big distribution network of wallboard distributors in Britain under the names of Jewson and Grahams.
The acquisition of BPB would give Saint-Gobain a dominant position in manufacturing as well. BPB controls 58% of the British wallboard market, followed by Lafarge and Knauf, which each have approximately 21%. In plaster BPB is estimated to have about 90% market share.
Distributors say that in an industry that faces capacity issues (i.e. tight supply), this position could be abused. Wallboard makers such as BPB work closely with architects and developers, and frequently specify what type of wallboard or other building products should be used. This could potentially make it more difficult for smaller, independent distributors to source their product from other suppliers. The smaller, independent distributors, also fear there could be priority service levels for the Saint-Gobain owned distribution network coupled with shorter lead times or availability abuse during periods of tight supply.