Mergers: Commission approves proposed acquisition of Evonik by CVC and RAG-Stiftung
- Germany
- 09/08/2008
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of joint control in Evonik industries AG of Germany by CVC Capital Partners Group SARL of Luxembourg and RAG-Stiftung of Germany. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Evonik is active in the specialty chemicals business, energy and real estate. CVC provides investment advice and manages investments. It controls a number of companies (“CVC Portfolio Companies”), including Flint, active in printing inks, Taminco, active in chemicals and Univar, active in chemicals distribution. The RAG-Stiftung is a German civil law foundation established to further the restructuring of the RAG group, which contains the coal mining activities in the German states of North-Rhine Westphalia and Saarland. It is the ultimate parent entity of both the RAG group and the Evonik group. It is currently active both in non-coal mining (through Evonik) and coal mining (through RAG).
Both Evonik and CVC are active on the market for thermoplastic metacrylate resins, a specialty chemical with many applications, including printing inks. In addition, there are a number of vertical relationships between the two companies in the markets for input materials for print inks, various specialty chemicals and the distribution of commodity and specialty chemicals.
The Commission’s examination of the proposed transaction showed that the horizontal and vertical overlaps between the activities of Evonik and some of the CVC Portfolio companies are limited and that, for all products concerned, they would continue to face several strong, effective competitors with significant market shares.
The Commission also analysed the potential risks of the merged entity closing off supplies to competitors as a consequence of the vertical links. However, the Commission’s investigation found that there would be no risk of any of the affected markets being closed off as there are alternative and competing sources of supply and various alternative customers on the downstream markets.
