On Tuesday 26 June, the European Commission decided to open an in-depth investigation into the planned acquisition by BASF of the 'nylon' activities of Solvay at international level, as it has concerns that the transaction will reduce competition in the supply of inputs, key elements in the production of nylon.
The companies, which are active in the manufacturer of nylon compounds and fibres, notified the Commission of the planned transaction on 22 May of this year. Solvay is currently the only player in the European Economic Area (EEA) with assets at all levels of the production chain, which is therefore not the case with BASF.
The transaction as notified would have the consequence of creating a player active in nylon compounds whose market share would be almost double that of its nearest rival. The entity resulting from this merger would also control production capacity at all levels of the nylon production chain, which no other player would be capable of doing and which would have the effect of creating a dependency of the others upon this new entity for the supply of certain inputs.
The institution also considers at this stage that competition could not be assured by the arrival of potential newcomers to the market.
It has therefore opened this in-depth investigation and has until 31 October of this year to make its decision. (Original version in French by Lucas Tripoteau)