Partial approval of a concentration in the chemical distribution sector

According to the European Commission, the acquisition of the Belgian and Dutch branches of Eurochem by Univar should not significantly affect competition. On the contrary, the analysis of the French market revealed less effective competition. The final decision is in the hands of the French Competition Authority.

Eurochem, also known as Quaron, is a chemical company active in Belgium, France and the Netherlands.

Last February, the worldwide company, Univar concluded an agreement with Eurochem, under which Univar would acquire sole control of Eurochem by way of purchasing shares.

In accordance with Article 4 of regulation 139/2004, both parties notified the European Commission of the agreement three months later.

The Commission investigated separately the effect of the transaction on each state’s market.

The investigation of the Belgian and Dutch markets did not reveal any major adverse effect on the competitors which were considered to be powerful enough to withstand the newly created undertaking. Therefore, the transaction was approved in both countries.

On the other hand, in France, Eurochem and Univar only have one effective competitor (Brentag). This is the reason why the Commission feared that the merger would facilitate the coordination of the conduct of the two remaining competitors. In other words, the transaction would probably increase the chances of eliminating effective competition in the French chemical distribution market. The corrective measures suggested by the parties did not convince the Commission to change its position.

Given the possible major effects of the transaction on the French market, France asked the Commission to transfer the final decision- making power to the French Competition Authority. The Commission accepted this request.

Hence, while the Belgian and Dutch aspects of the merger dealt with, the implementation of the French part depends on the assessment of the French Competition Authority.