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European Commission

Press release

Brussels, 8 May 2014

Mergers: Commission approves PVC joint venture between INEOS and Solvay, subject to conditions

Following an in-depth investigation, the European Commission has cleared under the EU Merger Regulation the proposed combination of the European chlorvinyls businesses of INEOS AG of Switzerland and Solvay S.A. of Belgium into a newly created joint venture. The approval is conditional upon the divestiture of certain of INEOS' suspension polyvinyl chloride ("S-PVC") plants and related assets. This divestment will provide its purchaser with a self-standing S-PVC business capable of competing with the new joint venture. The Commission had concerns that the transaction, as originally notified, would have enabled the merged entity to raise prices for S-PVC in North West Europe and for sodium hypochlorite ("bleach") in the Benelux, since it combined the two largest suppliers in these markets. The commitments offered address these concerns.

Commission Vice President in charge of competition policy Joaquín Almunia said: "PVC is an important raw material used in the construction sector and in many other industries. The proposed commitments will ensure that the transaction will not result in higher prices to the detriment of businesses and consumers in Europe."

S-PVC is a type of resin, used for instance to produce pipes or window frames. Bleach is mainly used for water treatment, disinfection and laundry bleaching.

In the market for commodity S-PVC in North West Europe, the transaction, as originally notified, would have removed INEOS' strongest competitor, Solvay. The merged entity would have faced an insufficient competitive constraint from the remaining much smaller players and would therefore have been able to raise prices. In addition, the Commission found evidence that INEOS held, already before the transaction, a certain degree of market power, which enabled it to increase prices. The Commission's investigation also revealed that the parties' competitors would have had neither the capacity nor the incentives to expand production sufficiently to outweigh a price increase by the new joint venture. In addition, imports do not play an important role in this market and this is unlikely to change substantially in the next future. Finally, customers do not wield significant buyer power and would therefore have suffered from the reduction of supply options following the transaction. The Commission also found that the efficiencies claimed by the parties, even if accepted, would be limited if compared to the likely price increase resulting from the transaction and would therefore not be sufficient to offset its negative effects on customers.

In the market for bleach in the Benelux, the transaction would have created a market leader with a market share above 60%, whilst Akzo, the only other remaining player, would clearly have been unable to sufficiently constrain the merged entity to avoid price increases for customers.

To address these concerns, the companies offered to divest INEOS' S-PVC plants in Wilhelmshaven, Mazingarbe and Beek Geleen, together with the upstream chlorine and ethylenedichloride ("EDC") production assets in Tessenderlo and Runcorn. The merged entity and the purchaser will enter into a joint venture agreement for producing chlorine at Runcorn. The divestment will provide the purchaser with a fully integrated self-standing S-PVC business.

These commitments remove the overlaps between the parties' activities in both the market for commodity S-PVC in North West Europe and the market for bleach in the Benelux. The parties have committed not to close the proposed transaction before concluding a binding agreement for the sale of the divestment business to a suitable purchaser approved by the Commission. A set of purchaser criteria will ensure that these assets are sold to a purchaser capable of running the business as a competitive force in the market.

The Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. This decision is conditional upon full compliance with the commitments.


The Commission has already dealt with the PVC industry. In particular the Commission has approved two successive acquisitions undertaken by INEOS in this industry in the recent past: in 2008 the Commission approved after in-depth review INEOS' acquisition of Kerling (see IP/08/109) and in 2011 it approved INEOS' acquisition of Tessenderlo's PVC business (see IP/11/929).

INEOS and Solvay notified the planned transaction to the Commission on 16 September 2013. The Commission opened an in-depth investigation on 5 November 2013 (see IP/13/1040). On 21 January 2014, the Commission informed the parties in a statement of objections that the proposed transaction, as originally notified, raised serious competition concerns in the market for commodity S-PVC in North West Europe and in the market for bleach in the Benelux.

The Commission's investigation found that the proposed transaction would not raise competition concerns in all other markets where the parties' activities overlap or are vertically related, in particular in the markets for butadiene, raffinate1, chlorine, caustic soda, vinyl chloride monomer, hydrochloric acid, emulsion PVC, methylene chloride and chloroform. This is mainly because of the limited change in the combined market share and the presence of other market players able to exert a sufficient constraint.


INEOS is the parent of a group of companies which are active in the manufacture of petrochemicals, specialty chemicals and oil products. Its subsidiary, INEOS ChlorVinyls, is a European producer of chlor-alkali products and a supplier of polyvinyl chloride ("PVC").

Solvay is the parent of a group of companies which are internationally active in the research, development, production, marketing and sale of chemicals and plastics. Its subsidiary, SolVin, is a European supplier of PVC resins.

The joint venture will be jointly controlled by its two parents. According to the agreement between INEOS and Solvay, no later than six years after its creation, the joint will pass under the sole control of INEOS. The transaction may be then subject to further review by the Commission.

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 notified 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).

There are currently five other on-going phase II merger investigations. The first one concerns the proposed acquisition of the German cement company Cemex West by its rival Holcim of Switzerland (see IP/13/986). The deadline for a final decision in this case is 8 July 2014. The second on-going investigation, the planned acquisition of Telefónica Ireland by Hutchison 3G UK (H3G), concerns, the markets for retail mobile telephony and for wholesale access and call origination in Ireland (see IP/13/1048). The deadline for a final decision in this case is 20 June 2014. The third one concerns the proposed acquisition of E-Plus by Telefónica Deutschland (see IP/13/1304 and IP/14/95) with a deadline suspended from 5 May 2014. The fourth phase II investigation concerns the planned acquisition by Huntsman of a number of equity interests held by Rockwood, both of the US (see IP/14/220). The deadline for a final decision in this case is 18 September 2014. The last ongoing phase II case was opened in April 2014 into the planned acquisition of certain assets of the Swiss building materials group Holcim by its Mexican rival Cemex (see IP/14/472). The deadline for a decision in this case is 5 September 2014.

More information will be available on the competition website, in the Commission's public case register under the case number M.6905.

Contacts :

Antoine Colombani (+32 2 297 45 13, @ECspokesAntoine)

Marisa Gonzalez Iglesias (+32 2 295 19 25)

For the public: Europe Direct by phone 00 800 6 7 8 9 10 11 or by e­mail)

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