The Netherlands Competition Authority (NMa) is to conduct a further investigation into the merger of two housing corporations in Eindhoven. According to NMa, a dominant position may arise or be strengthened on the market for social housing, in particular in the cheap and affordable segment, due to the merger of Woonstichting Hertog Hendrik van Lotharingen (HHvL) and Woningstichting SWS.
Such a dominant position may have adverse consequences with regard to price, quality and diversity in the supply of housing to consumers. NMa has therefore decided that a licence is required for the realisation of this merger.
Both corporations offer rented housing and units for rental in the municipalities surrounding Eindhoven and, from a geographical perspective, are each other's closest competitors. The next closest competitor is approximately a third of the size. After the merger, the parties will have a larger joint market share, in particular on the market for cheap and affordable social housing. In addition, this market experiences hardly any competitive pressure at all from privately owned rented housing and housing for purchase. On the grounds of research carried out to date, NMa also deems it possible that a dominant position may arise or be strengthened due to the merger in Eindhoven and surrounding municipalities, in particular on the market for cheap and affordable social rented housing.
If Woonstichting Hertog Hendrik van Lotharingen and Woningstichting SWS apply for a licence, NMa is required to take a decision within 13 weeks on whether the merger is or is not permitted. In the licensing phase, NMa will then conduct a more in-depth investigation into the exact definition of the relevant product markets and the geographical market for social rented housing. In addition, further research will be carried out into the consequences of the proposed merger in relation to the development of locations for (mainly) social housing and the acquisition of developed social housing projects.
As NMa announced in its Agenda 2006, the regulator will conduct an in-depth investigation into housing corporations in order to enable it to continue assessing mergers in this sector adequately. Consideration will be given in this regard to, for instance, the opportunities and incentives which housing corporations have to compete with each other. This will also be an explicit focus of the investigation in the licensing phase.