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Brussels, 30 January 2008

Mergers: Commission approves proposed acquisition of Kerling by Ineos

The European Commission has approved under the EU Merger Regulation the proposed acquisition of Kerling, the polymer division of the Norwegian company Norsk Hydro group, by the UK based company Ineos. Both companies are active, inter alia, in the production of PVC. After an in-depth investigation, the Commission concluded that the proposed operation would not significantly impede effective competition in the European Economic Area (EEA) or in a substantial part of it.

Ineos is a leading global manufacturer of petrochemicals, specialty chemicals and oil products. It comprises eighteen businesses and, although it is present worldwide, its activities are mainly focussed in Europe.

Kerling is a subsidiary of Norsk Hydro ASA and comprises the polymer division of the Norsk Hydro group. It is mainly active in the production, marketing and sale of polyvinyl chloride (PVC) and caustic soda.

On 7 September 2007, the Commission concluded after a first phase investigation that the notified operation raised serious doubts as to its compatibility with the Single Market and with the EEA Agreement and decided to open an in-depth enquirysee IP/07/1290). These concerns related in particular to the impact that the transaction could have had on the commodity Suspension PVC market (S PVC) in the UK, Norway and Sweden, as the Commission believed the geographic scope of the S PVC market might be national.

During the in-depth investigation, the Commission carefully examined the above mentioned markets and concluded that their geographical dimension is wider than national and comprises at least North Western Europe. The Commission's investigation showed that commodity PVC producers located in continental North Western Europe exert sufficient competitive pressure in the UK, Norway and Sweden and constitute a credible alternative source of supply for the customers in these areas.

The Commission also investigated the impact of the concentration in other markets, including the markets for caustic soda and PVC compounds and concluded that the proposed transaction was not likely to give rise to any competition concerns in these markets either.
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