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Brussels, 18 November 2002

Commission clears take-over of Degussa by RAG subject to divestiture commitments

The European Commission has approved, subject to conditions, the acquisition of the German specialty chemicals company Degussa AG by the German mining and technology group RAG. The transaction initially raised competition concerns in the construction materials sector, more specifically regarding certain products used in the production of concrete to improve its performance. But RAG offered to divest its production capacity for Naphtalene Sulfonate in the EU, an important concrete admixture input product, which removed the Commission's concerns.

RAG Aktiengesellschaft is an international mining and technology group based in Germany. Its business activities comprise coal mining, power generation, environmental technology, chemicals and plastics.

Degussa AG is a German-based international company which makes specialty chemicals. Its activities range from food additives to construction chemicals, coatings and specialty polymers. Degussa is currently 64 % owned by the German utility group E.ON.

The Commission's investigation showed that the combination of RAG's and Degussa's activities could have led to the creation of a dominant position in the field of input products for concrete admixtures. These products are designed to influence the viscosity and water content of concrete to make it more workable.

But in order to remove these competition concerns, RAG offered to divest its Naphtalene Sulfonate (NSF) business in the EU, an important concrete admixture input product, including production plants in Italy, Spain and Germany.

The Commission's market tests proved that these commitments will eliminate the overlap of RAG's and Degussa's activities and will enable a viable new competitor to be created in order to remedy the removal of Degussa as an independent supplier.

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