EU Will Investigate Ineos-Solvay PVC Merger in Depth
After initially extending its approval deadline until Nov. 5, the European Commission's (EC) competition arm has now launched an in-depth investigation into the possible effects of the planned Ineos-Solvay PVC joint venture on the European Economic Area (EEA) market.
The Commission said its concerns apply in particular to suspension PVC (S-PVC) and sodium hypochlorite, a bleaching agent, for which it has identified both companies as "key players." The authority now has until March 21, 2014 to make a decision.
Following its initial investigation, the EC said it believed that combining the two leading producers of S-PVC in the EEA and northwest Europe and the leading supplier of hypochlorite in Belgium, could weaken the competitive position of the remaining players. What's more, the removal of the competitive constraint the two companies exert on each other could lead to "a reduction of choice for customers and potentially to an increase in prices for the products concerned."
To allay the competition authority's fears, Ineos previously offered to sell a 320,000 t/y PVC plant at Schkopau, Germany, and a 370,000 t/y plant at Wilhelmshaven, Germany, to facilitate EU approval. However, the Commission said "the commitments failed to provide a sufficiently clear-cut solution."
Despite the extended probe, Ineos and Solvay said they were "confident" that the jv would be cleared. Solvay already has removed its PVC activities from its books and declared them as assets to be held for divestment.
Even after the proposed divestments, Ineos - which in recent years has bought up vinyls assets of several European players, including Dow, Tessenderlo and the former joint venture of ICI and Enichem - would remain Europe's largest player.