The European Commission has opened a formal investigation into several construction chemicals companies on suspicion of price fixing. Sika AG, a Swiss company that makes additives used in cement, concrete, and mortar, is one of the names on the list. The company's share price fell as much as 3.1% to its weakest level in more than a month after the news broke.
Also being investigated are Remei AG, Liesen, TAM, MC-Bauchemie Mueller GmbH & Company KG, Master Builders Solutions, Mapei, and Chryso. The investigation focuses on the period from 2021 to 2022, during which authorities suspect the companies might have swapped confidential data and agreed on upcoming price hikes for chemical additives and admixtures.
The suspected coordination happened at a time when raw-material costs were soaring. In the aftermath of the Covid-19 pandemic and the Russian invasion of Ukraine, the prices of raw materials for construction chemicals surged. European regulators worry that, rather than engaging in price competition, these firms may have colluded on price hikes, thereby driving up expenses throughout the construction industry.
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The investigation is still in its early stages. The Commission has not made any final decisions. It has what it calls "preliminary concerns," and the firms now have an opportunity to present their side of the story prior to the Commission reaching a definitive conclusion.
Sika, a global leader in construction chemicals, has been operating in a sluggish worldwide building sector as it integrates the MBCC acquisition that concluded in 2023. The Swiss firm has launched a cost-reduction program targeting savings of 60 million Swiss francs, which is equivalent to about 65 million euros, for this fiscal year.
The probe adds to the regulatory challenges facing the construction chemicals sector, which has already been dealing with volatile raw material costs and slowing demand. For Sika, the investigation comes at a delicate time as the company works to finalize the integration of MBCC, a deal that expanded its product portfolio and geographic footprint. The cost-saving program is intended to offset some of the pressures from the weak construction market. Meanwhile, the other accused firms range from small specialized suppliers to large multinational players, and all now face the risk of significant financial penalties if the Commission finds evidence of coordinated behavior.
The construction chemicals industry has been under strain from rising energy prices and supply-chain disruptions since 2021. Many companies passed on higher input costs to customers, but regulators suspect that the eight firms may have gone further by secretly agreeing on the timing and magnitude of price increases, potentially violating competition law. This investigation could reshape pricing dynamics in the sector if the Commission imposes fines or mandates changes in behavior.
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