On 5 August 2011, the European Commission approved a merger between the French company Rhodia and the Belgium-based group Solvay, on the grounds that a sufficient number of competitors will remain active in all markets concerned.
Solvay is a Belgium-based international industrial group active in the research, development, production, marketing and sale of chemicals and plastics. Rhodia is a French company which develops, produces and sells speciality chemicals.
Despite the fact that their activities are, on the whole, complementary, a merger between these two companies would still result in some horizontal overlaps and vertical relationships. This is the reason why the European Commission started an investigation after Solvay's proposal to acquire Rhodia.
The main horizontal overlaps concern several molecules belonging to the family of organic fluorinated intermediate chemicals (OFICs). These molecules are used for different applications in various sectors such as agrochemicals and pharmaceuticals. Both companyies also produce sodium silicate, which is used in the manufacture of detergents and pulp/paper.
After an investigation under the EU Merger Regulation, the Commission decided that the proposed transaction would neither significantly influence the structure of the relevant markets nor affect the merged entity's incentive or ability to shut out competitors or customers. The Commission emphasized the fact that there will still be a number of credible and significant competitors that will continue to exercise a competitive constraint on the merged entity in each of the relevant markets.
In addition, the Commission investigated the presence of conglomerate anticompetitive effects as a result of the selling of a number of products to the same group of customers within the same industry. This investigation did not reveal any serious concerns.
