Construction, Estonia, EU – Baltic States, Industry, Markets and Companies

Consolis Group, a holding of US investment company Bain Capital, announced at the beginning of August the signature of a purchase agreement with the Estonian company TMB Group. The closing of the transaction was expected by early 2019.

In September, the Competition Authority took additional time for the procedure concerning the consolidation of the Consolis group companies Parma Oy and TMB, which meant that the Competition Authority had four months to decide about whether or not to approve the consolidation.

An announcement published on Tuesday says the Competition Authority terminated the procedure as the parties abandoned the consolidation. Maarja Uulits, head of PR at the Competition Authority, told Postimees that they had indicated to Consolis that the consolidation may bring with it a competition problem on the Estonian market as Consolis already owns a major manufacturer of concrete elements, E-Betoonelement.

It appears from the notice submitted to the Competition Authority that TMB would have been taken over by the Finnish company Parma Oy.

Consolis at present owns the manufacturer of prefabricated concrete components E-Betoonelement in Estonia, which posted a profit of one million euros on sales of 32.9 mln euros for 2017. This means that the transaction would affect the goods markets for the manufacture and sale of construction products made from prefab concrete and prefab concrete elements, the parties to the consolidation said in their notice of consolidation.

TMB Group, the former Tartu Maja Betoontoote AS, was established in 1961. The company had sales of over 120 mln euros in 2017 and it employs a workforce of almost 500 people. Its net profit was 14.5 mln euros in 2017 and 5.3 mln euros in 2016.

Jaan Luts, CEO of TMB, and Vallot Mangus, chairman of the supervisory board of TMB, each own 32.2% of TMB. Mika Saarelainen, a Finnish national, owns 11.73% of the shares, whereas the names of the owners of the remaining shares do not appear from the Commercial Register.

In the notice of consolidation filed with the Estonian Competition Authority, Consolis explained that the transaction will enable it to grow its business in the Baltic countries and Scandinavia and that Consolis hopes to use the production assets of TMB group to boost sales primarily in Finland and Sweden. The notice also says that it was first and foremost a wish of the sellers to exit operations related to prefabricated concrete elements that led to the transaction. Luts and Mangus have been active in TMB since the early 1990s.

Two years ago, TMB acquired the Finnish prefabricated concrete products maker Betonimestarit OY, creating a company with annual sales of almost 100 mln euros and plants in Finland, Estonia and Latvia.

TMB Group has subsidiary TMB Elements in Latvia and Consolis Group has subsidiary Consolis Latvija.