Mergers: Commission approves Synthomer’s acquisition of Omnova, subject to conditions

business man

(Ben Rosett, Unsplash)

This article is brought to you in association with the European Commission.


The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Omnova by Synthomer, both manufacturers of specialty chemicals. The approval is conditional on the divestment of a remedy package.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said:Specialty chemicals, including vinyl pyridine latex, are essential inputs in many consumer products, notably in the production of tyres for the automotive industry. Synthomer and Omnova are the only two manufacturers of this type of latex in Europe but we can approve their merger because the companies offered to divest all of Synthomer’s VP Latex production, thus preserving for customers the competitive situation in the market”.

Omnova and Synthomer are both manufacturers of speciality chemicals, including vinyl pyridine latex (“VP Latex”). This chemical product is primarily used by tyre manufacturers to provide safer and more solid tyres to the automotive industry.

The Commission’s investigation

The Commission had concerns that the transaction, as originally notified, would have reduced competition on the market for the supply of VP Latex.

In particular, the Commission’s market investigation confirmed that the market for the supply of VP Latex in the European Economic Area (EEA) is highly concentrated, as Synthomer and Omnova are the only two players with production capacity in the EEA and the market is characterised by high barriers to trade across regions.

The acquisition would therefore have likely led to higher prices, reduced choice in products and lower quality of services provided to customers.

The proposed remedies

To address the Commission’s competition concerns, Synthomer offered to divest its global VP Latex business.

The divestment includes the full transfer of the required technology, brands, manufacturing equipment, and other intangibles assets to a manufacturer with the proven knowledge regarding the relevant chemistry.

The commitments fully address the Commission’s concerns as they remove the entire overlap between Synthomer and Omnova’s activities in VP Latex. The commitments also ensure that the same number of suppliers will remain active on the market of VP Latex and that customers continue to enjoy the same level of choice.

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

Companies and products

Synthomer plc, headquartered in the UK, develops and manufactures specialty chemicals for use in a variety of applications, such as medical gloves, paper, carpet, bedding, footwear, coatings, adhesives and cement. Its activities are mainly concentrated in Europe.

Omnova Solutions, Inc., headquartered in the US, develops and manufactures specialty chemicals and thermoplastic films for a variety of applications, such as coatings, adhesives, films, oil and gas, plastics, rubber, paper, carpet and coated fabrics. Its activities are mainly concentrated in the US.

Merger control rules and procedures

The transaction was notified on 15 November 2019.

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) or that have been referred to it (see Article 4(5) 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). This deadline is extended to 35 working days in cases where remedies are submitted by the parties, such as in this case.

More information will be available on the competition website, in the Commission’s public case register under the case number M.9502.

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

ECOFIN: Protecting bankers and tax-evaders

Young people meet in Malta to shape the future of Europe

Iraq: Over 150,000 children endangered by ‘freezing’ temperatures, warns UNICEF

The COP24 Agreement: Yes, it happened at last

‘The time for action is now’ senior UN peacekeeping official says, urging support for regional force combating Sahel terrorism

Migration surge leaves children stranded, begging on Djibouti’s streets

The West – the EU and the US – is writing off Turkey’s Erdogan

IMF: When high yield goes boom

Climate adaptation could make the world more peaceful

“Asia-Pacific takes stock of ambitious development targets”, written by the Heads of UNFPA and ESCAP

Brexit: European Commission recommends the European Council (Article 50) to endorse the agreement reached on the revised Protocol on Ireland / Northern Ireland and revised Political Declaration

UN Chief ‘strongly rejects’ Guatemala decision to expel anti-corruption body

G20 GDP growth nudges up to 1.0% in the second quarter of 2018

Huge data gaps’ hampering ‘evidence-based’ national migration policies

EU: 13 major banks may pay fines 10% of worldwide turnover

In DR Congo, UN Security Council says December polls are ‘historic opportunity’ for country

Nauru President warns of possible climate change ‘economic Armageddon’

The last goodbye of JADE’s Executive Board 2019

The revenge of the fallen

INTERVIEW: Poverty, education and inclusion top new General Assembly President’s priority list

GSMA Mobile 360 – Africa on 16-18 July 2019, in association with The European Sting

EU allocates €50 million to fight Ebola and malnutrition in the Democratic Republic of Congo

EU economy: Between recession and indiscernible growth

UN experts cite ‘possible exploitation’ of workers hired to clean up toxic Japanese nuclear plant

More hiring freedom can reduce teacher shortages in disadvantaged areas

Brexit negotiations: Can May’s Britain bounce back?

Ensuring the ‘lungs of the planet’ keep us alive: 5 things you need to know about forests and the UN

Real EU unemployment rate at 10.2%+4.1%+4.7%: Eurostat Update

Africa’s future is innovation rather than industrialization

Seaweed, enzymes and compostable cups: Can ‘Big Food’ take on plastic and win?

Sweden must urgently implement reforms to boost fight against foreign bribery

Can China deal with climate change without the U.S.?

Lessons from the Global Entrepreneurship Index

UN expert ‘shocked’ by Egyptian reprisals against human rights defenders she met

What’s happening to Greenland will affect the whole world – and our leaders need to understand why

Claude Akpokavie, Senior ILO Adviser:“Engaging in policy debates and organizing workers, are two key challenges faced by unions in Export processing zones”

This 12-year-old built an underwater robot to fight plastic pollution

Saudi Arabia expresses ‘regret and pain’ over Khashoggi killing, during UN rights review

EU shapes its ambitious strategy on India

UN agency chiefs condemn Saudi-coalition led air strike that killed dozens in western Yemen

The EU approves a new package of budget assistance to the Republic of Moldova to support rule of law and rural development reforms

EU supports recovery and resilience in Nigeria with additional €50 million

Protecting farmers and quality products: vote on EU farm policy reform plans

Fairer and clearer rules on social benefits for EU mobile workers agreed

How to help companies become global defenders of LGBTI rights

Costa Coffee products (Copyright: Costa Coffee; Source: Costa Coffee website, Press area)

The start of the “Caffeine rush”: Coca-Cola acquires Costa Coffee days after Nestlé-Starbucks deal

5 things you probably didn’t know about global health

The Government of China and UNIDO partner to develop technical guidelines for standards of small hydropower development

5 lessons for the future success of virtual and augmented reality

The Commission tells Berlin it is legally obliged to help Eurozone out of stagnation

Climate change: won or lost in cities or by cities?

More refugees being helped by family, work and study permits, finds OECD and UNHCR study

EU unveils plan to accelerate Capital Markets Union ahead of London’s departure from the bloc

Parliament demands ban on neo-fascist and neo-Nazi groups in the EU

2014 will bring more European Union for the big guys and less for the weak

EU’s tougher privacy rules: WhatsApp and Facebook set to be soon aligned with telcos

Draghi: A bridge from Brussels to Berlin

Six ways to cut through the Middle East’s geopolitical fog

Boardroom warriors: how CEOs are becoming champions of change

New state aid rules: Commission increases national support to farmers up to €25,000

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s