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Brussels, 16 July 2012
Mergers: Commission clears acquisition of advanced composite material supplier Umeco by US rival Cytec Industries
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the UK-based manufacturer and supplier of advanced composite materials Umeco, by Cytec, an American specialty chemicals and materials company. Advanced composite materials typically combine a fibre and a resin resulting in a material that can replace metals such as aluminium and steel in the production of, for example, aircraft or automotive components. The Commission found that the merged entity would continue to face a number of strong competitors in the markets in which it is active and that the proposed transaction would therefore not raise competition concerns.
The parties' activities overlap mainly in the manufacture and supply of "prepregs", a specific form of advanced composite material. Prepregs are used to produce parts in a wide range of sectors including the aerospace and automotive industries as well as other industrial applications where they can replace conventional metal materials such as aluminium and steel. The parties' activities also overlap in the manufacture and supply of certain types of adhesives.
The Commission's investigation revealed that the proposed transaction would not lead to competition concerns in any of the above mentioned markets, since the relevant market structures would not be significantly altered and there would be sufficient competitors on the markets concerned.
The Commission therefore concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
The proposed transaction was notified to the Commission on 11 June 2012.
Companies and products
Cytec is a US-based global specialty chemicals and materials company listed on the New York Stock Exchange. It has approximately 5,500 employees and sales in more than 115 countries worldwide.
Umeco is a company registered in England and Wales and listed on the London Stock Exchange. Umeco is a global manufacturer and supplier of composite materials, primarily to the aerospace and defence, industrial, automotive and recreational industries.
Advanced composite materials (ACMs) comprise a combination of a high performance fibre reinforcement material (typically carbon fibre) and a formulated resin system used to support and bond the fibres in a composite. ACMs exhibit a number of desirable properties, including light weight, high stiffness, high strength, dimensional stability and configurability into complex shapes, temperature and chemical resistance, flex performance, high corrosion resistance and low thermal expansion. ACMs are increasingly replacing conventional metal materials such as aluminium and steel in the manufacture of components, notably in military and civil aerospace applications, industrial applications (including automotive components) and recreational applications (e.g. skis, tennis racquets, etc.).
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of mergers do not pose competition problems and are cleared after a routine review. 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).
More information on the case is available at:
Antoine Colombani (+32 2 297 45 13)
Marisa Gonzalez Iglesias (+32 2 295 19 25)