Brussels, 3rd August 2007
The European Commission has cleared under the EC Merger Regulation the proposed acquisition of GE Plastics of the US by Saudi Basic Industries Corporation ("Sabic"), based in Saudi-Arabia. After examining the effects of the operation on customers and competitors, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or a substantial part of it.
Sabic is a producer of various basic chemicals, fertilisers and other products, and is in particular active in the markets for plastics and raw materials thereof on a world-wide basis.
GE Plastics is also a leading manufacturer of plastics with worldwide activities. GE Plastics is currently a part of the General Electric Company.
The Commission found that the product portfolios of both companies are largely complementary, Sabic focussing on raw materials and commodity plastics, GE Plastics being rather specialised in more refined types of plastics, notably so-called "engineering plastics". Accordingly, the proposed transaction would not lead to significant overlaps in any market.
Since Sabic is a supplier of various raw materials that can be used by GE
Plastics for its own plastics production, the Commission has also analysed
whether such a vertical integration might give rise to any competition concern.
The Commission's market investigation showed, however, that neither Sabic nor GE
Plastics holds an important position as a supplier or customer that would allow
the merged firm to close off other competitors from access to important raw
materials or to deprive competitors of an important raw material customer.