European Commission Approves Styrene Joint Venture of BASF and INEOS
The decision is conditional upon the divestment of activities in the ABS sector. ABS is a chemical product used for instance in computer keyboards or steering wheel covers.
6/2/2011 --- The European Commission has cleared under the EU Merger Regulation the creation of a joint venture combining the existing styrene monomer, polystyrene and acrylonitrile–butadiene-styrene (ABS) businesses of INEOS of Switzerland and BASF of Germany. The decision is conditional upon the divestment of activities in the ABS sector. ABS is a chemical product used for instance in computer keyboards or steering wheel covers.
The proposed transaction, as initially notified on 7 April, would have created a very strong player in a market where concentration is already high. To remedy the Commission's concerns, the parties offered to divest part of INEOS’ ABS production business thus reducing the overlap. The Commission's investigation showed that the divested businesses would be viable and that the commitments would resolve all identified competition concerns.
In light of the commitments, the Commission concluded that the transaction does not raise competition concerns.
BASF is the world’s largest chemical company. It is mainly active in the supply of chemicals, crude oil and natural gas, including specialty chemicals, plastics, performance products, functional solutions and agricultural solutions. INEOS is a conglomerate that produces a range of chemicals including petrochemicals, specialty chemicals and oil products.
The proposed joint venture will combine INEOS’ and BASF’s existing styrene monomer, polystyrene and acrylonitrile–butadiene-styrene (ABS) businesses, together with certain minor related products.
The Commission's investigation revealed that the proposed transaction would not significantly modify the structure of the majority of the relevant markets, as a number of credible and significant competitors would continue to exercise a competitive constraint on the joint venture.
However, the Commission found that the proposed transaction, as initially notified, would have raised competition concerns in the market for ABS, where the merged entity would have had a strong position in a market where the concentration level is already high. ABS is a chemical product used in a variety of applications including, for instance, refrigerator door caps, vacuum cleaner components, washing machine panels, computer keyboards and housings, dashboard components and steering wheel covers.
