BRUSSELS,
July 19, 2010
(Press Release) -
The European Commission has approved under the EU Merger Regulation part of the proposed acquisition of the activities of Eurochem by Univar, both chemical companies. Eurochem is also known as Quaron. The Commission found that Univar's acquisition of the Belgian and Dutch activities of Eurochem would not significantly impede effective competition in the European Economic Area (EEA). At the same time, the Commission has referred the part of the proposed acquisition relating to Eurochem's activities in France to the French competition authority at its request. After a preliminary investigation, the Commission found that this part of the proposed transaction would threaten to significantly affect competition in the distribution of chemicals in France. Those aspects will now be examined by the French competition authority under national law.
On 5 February 2010, Univar and Eurochem, also known as Quaron, concluded an agreement according to which Univar would acquire all shares of Eurochem.
Univar, which is controlled by CVC Capital Partners, and Eurochem are both active in the distribution of commodities and specialities chemicals. CVC also controls Taminco and Evonik, which both produce and supply certain chemicals. Commodities are widely available and low-priced chemicals such as alcohol, caustic soda, hydrochloric acid, which are used by a wide variety of customers. Specialties are high-priced, branded products distributed in small quantities to selected customers, which are active in particular in coating, cosmetics and personal care, food and feed, pharma and healthcare.
With regard to the markets for the distribution of commodities and specialities in Belgium and The Netherlands, the Commission's investigation revealed that the horizontal overlaps will not give rise to competition concerns, because in particular, different from the competitive landscape in France, other players will put sufficient constraints on the merged entity. Furthermore, the supply relationships between Eurochem and Taminco and Evonik are limited. Therefore, the Commission granted clearance with regard to the distribution of chemicals in Belgium and the Netherlands as well as with regard to the vertical links.
France asked the Commission to refer the part of the concentration concerning the French markets for the distribution of chemicals to the French competition authority, claiming that the proposed transaction would threaten to significantly affect competition in France.
The Commission's investigation confirmed that the proposed transaction would lead to significant overlaps in the distribution markets in France. For commodities, a majority of stakeholders raised concerns that the transaction could negatively affect competition in particular in Western France. It would lead to a reduction of national players from three to two and would remove a significant competitive constraint on Univar and its main competitor Brenntag. At a national level, the merger would increase the symmetry between Brenntag and the merged entity, which could be an indication that coordinated effects might result from the merger.
Following a market test of the remedies offered by the parties, the Commission concluded that they were not sufficient to remedy these concerns and bring into question its decision to refer the case to France.
The French competition authority is, in the Commission's view, the best placed to investigate the effect of the transaction on the French markets. The Commission has therefore referred the assessment of the French part of the transaction to the French competition authority.
The transaction was notified to the Commission on 28 May 2010. More information on the case will be available at: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_5814
