IP/11/394
Brussels, 1 April 2011
Mergers: Commission clears acquisition of Norwegian company Elkem by China National Bluestar
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Norwegian silicon producer Elkem by China National Bluestar. The Commission carefully examined the proposed merger, including for possible coordination by the Chinese State of market behaviour of different State-owned firms, and concluded that there would remain sufficient competition in the silicon market. Other strong players serving European consumers include FerroAtlántica of Spain, Dow Corning of the US and Germany's Wacker.
"The Commission examined this merger carefully for possible coordination by the Chinese State of market behaviour of Chinese State-owned companies in the same sector as we also do for mergers involving European State-owned undertakings. But even assuming all Chinese State-owned firms in the sector acted as one, European consumers would still enjoy sufficient competition from other players serving the market," said Joaquín Almunia, the European Competition Commissioner. He added: "As we celebrate 20 years of merger control at EU level this case is a further illustration of our continuous effort to preserve effective competition in the market while being fair and transparent."
Elkem is a Norwegian company primarily active in the production and sale of (i) silicon related materials, namely silicon metal, ferrosilicon and microsilica and (ii) carbon products such as electrode paste which are mostly used as carbon electrodes in electric furnaces to make aluminium or steel.
Bluestar is a subsidiary of China National Chemical Corporation ('ChemChina'), a diversified company, owned by the Chinese State, active in the production of a wide range of chemical products.
As the Chinese silicon industry has a significant market share overall, the Commission investigated in detail to what extent Bluestar and ChemChina are taking their business decisions independently from other State-owned undertakings in the same sector. The Commission also examined whether there are signs of other forms of State coordination of market behaviour of Chinese firms in the silicon industry.
Our investigation showed that the Chinese silicon industry is highly dispersed with around 200 firms, many of which are privately owned. Most of the State-owned ones are also under the control of regional authorities, not the central government. Moreover customers in Europe were of the opinion that there does not appear to be coordination of market behaviour amongst producers.
Considering the limited market share of the combined Elkem-Bluestar on the markets concerned and the presence of strong players serving the European consumers, such as FerroAtlántica of Spain, Dow Corning of the US and Wacker of Germany, the Commission concluded that the transaction does not raise competition concerns.
The assessment of the links between Chinese State-owned companies in the same sector relied on the same criteria as those applied for assessing mergers involving European State-owned companies.
Merger control rules and procedures
The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Art 1 of the Merger Regulation) regardless of where they are headquartered. The substantive test is whether a notified transaction would lead to a significant impediment to competition in the EEA and make consumers worse off.
From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
The transaction was notified to the Commission on 24 February 2011.
More information on the case is available at:
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_6082
