The European Union has imposed a €40 million ($44.7 million) penalty on Irish building materials manufacturer Kingspan Group after finding that the company supplied inaccurate and misleading information during a regulatory review of its unsuccessful takeover of Slovenian rival Trimo.
The European Commission announced the penalty Thursday following an investigation into Kingspan’s compliance with EU merger disclosure requirements, according to Reuters.
The decision highlights the financial risks companies face when regulators determine that information submitted during merger proceedings is unreliable, even when the proposed transaction is ultimately abandoned.
According to Reuters, European competition authorities concluded that Kingspan had misrepresented information relevant to assessing competition in the building materials industry. The disputed disclosures concerned market penetration measurements, access to bidding records and the involvement of company directors in certain corporate matters.
The Commission also identified inaccurate or misleading disclosures concerning research and development activities involving mineral fiber sandwich panels, according to its published decision. These construction products are used in industrial and commercial buildings.
The regulator determined that Kingspan committed four separate violations of EU merger rules, imposing a €10 million penalty for each infringement.
Failed Acquisition Draws Regulatory Scrutiny
Kingspan’s regulatory difficulties stem from its proposed purchase of Trimo, a Slovenian manufacturer operating in overlapping building materials markets.
The Irish company notified European authorities of its acquisition plans in March 2021, prompting a detailed competition review.
Regulators subsequently raised concerns that combining the businesses could weaken competition in certain construction materials markets, potentially increasing prices, reducing product quality and limiting customer choice.
Kingspan and Trimo abandoned the proposed transaction in April 2022, Reuters reported.
The collapse of the acquisition did not end regulatory scrutiny.
In November 2022, the European Commission began a separate investigation into whether Kingspan had met its legal obligations to provide accurate information during the original merger review.
Read more: Kingspan Pushes Back Against EU Allegations Over Trimo Deal
That investigation eventually resulted in the financial penalty announced Thursday.
EU Regulators Emphasize Disclosure Obligations
The Commission’s findings centered on information that competition authorities rely upon to evaluate the potential effects of corporate acquisitions.
According to the regulator, Kingspan provided misleading explanations of how it measured market penetration for mineral fiber sandwich panels and whether records of successful and unsuccessful commercial bids were available.
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Authorities also identified inaccuracies involving directors’ participation in acquisition discussions, corporate strategy and other business matters.
The Commission said the violations complicated its ability to evaluate the proposed transaction and concluded that Kingspan’s conduct was at least negligent.
EU competition chief Teresa Ribera emphasized the importance of reliable corporate disclosures, warning that withholding or misrepresenting material information threatens the effectiveness of merger enforcement.
According to Reuters, Ribera said the Commission would respond firmly when companies failed to meet their transparency obligations.
Under EU merger regulations, companies that intentionally or negligently submit incorrect or misleading information can face penalties of up to 1% of their worldwide revenue.
The rules apply to information supplied both in formal merger notifications and in responses to requests from competition authorities.
Financial Penalty Sends Broader Compliance Signal
The €40 million sanction represents a significant regulatory consequence for Kingspan, although the underlying acquisition never proceeded.
The Commission’s decision also illustrates how merger investigations can create legal exposure beyond the question of whether an acquisition should receive approval.
In its assessment, the regulator considered the seriousness of the disclosure violations and their effect on its ability to conduct a comprehensive competition review.
The Commission initially raised six objections against Kingspan but ultimately upheld four after considering the company’s responses, according to the Commission’s published account.
Kingspan previously disputed the regulator’s preliminary findings. In March 2024, the company told Reuters that the Trimo review had been unusually demanding, partly because the proceedings took place during the COVID-19 pandemic. At that time, Kingspan said it intended to continue cooperating with European authorities.
The October 8 Reuters report did not include a fresh response from Kingspan to the final penalty.
The ruling reinforces the European Commission’s position that companies seeking merger approval must provide complete and reliable information throughout the regulatory process.
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