European Commission Approves D’Ieteren’s Acquisition of PHE

The European Commission has approved D’Ieteren’s acquisition of PHE following an investigation into what the development would mean for competition in France’s auto glass repair and replacement industry. While the commission expressed competition concerns, D’Ieteren received approval after agreeing to divest Mondial Pare-Brise and the Glass Auto Service label.

The commission’s approval of the transaction is conditional on full compliance with commitments offered by D’Ieteren.

The investigation led to concerns that such a transaction would reduce competition in the industry in France. The commission wrote in a news release that Belron is a subsidiary of D’Ieteren and that its brands include Carglass, Safelite and Autoglass. PHE operates in the vehicle glass repair industry in France through a network of workshops under the brand Mondial Pare-Brise and through the Glass Auto Service label.

“Since the majority of car owners in France are insured for vehicle glass damages, insurance companies account for approximately 80-90% of the demand for vehicle glass repair and replacement. They usually also bear almost the entire cost of the repair,” the commission continues. “Therefore, insurance companies aim at subscribing framework agreements with networks of specialized glass repairers, in order to offer a comprehensive choice of repairers to their customers across the French territory and to negotiate the price of the repair.”

According to the commission’s investigation, the transaction would have seen an entity combine the market leader and an “unavoidable trading partner for many insurers,” Carglass, with Mondial Pare-Brise, its closest competitor, and another close competitor, Glass Auto Service.

“Carglass already carries out three times as many vehicle glass repair jobs as the next largest competitor,” the investigation found. “It also stands out from competing networks in having a strong brand image, recognized by most consumers. For these reasons, post-transaction, insurers would not be able to redirect a significant portion of their business to other specialist networks, different from the ones involved in the transaction.”

And so D’Ieteren offered to divest Mondial Pare-Brise and the Glass Auto Service in order to secure the commission’s approval, a move which proved fruitful. The commission wrote that those commitments fully removed the overlap in vehicle glass repair and replacement services about which it had concerns. A subsequent market test found that with the specified modifications, the transaction would no longer bring competition concerns.

“More than 90% of French motorists buy glass breakage insurance, and more than 3 million windshields are repaired each year. Lack of competition on this market could therefore result in higher insurance premiums for all consumers,” says Margrethe Vestager, executive vice president of the commission. “D’Ieteren and PHE are both leading providers of vehicle glass repair and replacement services in France. With the divestments approved today, the parties will be able to bring together their activities in the automobile repair and spare parts sectors, while ensuring that the transaction will not have a harmful impact on French motorists.”

The approval is conditional on full compliance with commitments offered by D’Ieteren.

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