In October 2019 Kingspan agreed to pay SIG £37.5m on a cash free, debt free basis for Building Solutions.
SIG Building Solutions makes cladding and sheeting under the brands Steadmans, United Roofing Products, Trimform Products, and Advanced Cladding & Insulation. It made an operating profit of £3.3m in 2018 on revenue of £60m.
The deal was always conditional on the approval of the UK Competition & Markets Authority (CMA).
Last month, after a preliminary investigation, the CMA expressed concern at the impact that the deal might have on market competition, with Kingspan getting too big a share of the building envelope market.
The CMA invited Kingspan and SIG to address its concerns or face a more in-depth investigation. The two companies declined to offer any undertakings that might appease competition concerns, which prompted the CMA to launch a full Phase 2 investigation into the deal.
Today SIG announced that the deal was off.
“The sale and purchase agreement regarding the disposal expires on 7th July 2020. It is anticipated that the CMA's Phase 2 investigation would conclude in October 2020 and accordingly the date in the agreement would need to be extended in order for the Phase 2 investigation to be carried out,” SIG said.
It continued: “As a result of the prevailing market conditions, it has not been possible for the company and Kingspan to agree commercial terms for the extension of the agreement. Accordingly, the parties have agreed to terminate the agreement with immediate effect and the disposal therefore will not proceed.”
SIG added: “The company is currently reviewing a number of options regarding the Building Solutions business and will provide further updates when appropriate.”