Brussels, 17/10/2001 (Agence Europe) - On Wednesday, the Commission decided to prohibit the planned acquisition by CVC Capital Partners Group Ltd (CVC) of Lenzing AG, an Austrian man-made fibres manufacturer. CVC already controls Accordis, Lenzing's main rival in Europe and only rival in the United States.
The acquisition would have led to very serious competition concerns in the viscose staple fibre market, where Lenzing is the leading supplier in the European Economic Areas (EEA), as well as in the market for lyocell staple fibres and technology, where the deal would have created a monopoly since Accordis and Lenzing are the only producers in the world. A Commission in-depth investigation revealed that the merger would have achieved very high combined shares of all three viscose markets (more than 55% for commodity viscose and more than 85% for spun-dyed viscose and viscose for tampons), and would have led to a world-wide monopoly on the lyocell production and technology markets. It would have eliminated Accordis' largest competitor in the EEA viscose market, leaving only three smaller, lower performance competitors, namely Sniace of Spain, Svenska Rayon of Sweden and Säteri of Finland. The investigation also showed that there are high entry barriers to the viscose market, where production is capital intensive, and that a substantial increase in viscose imports from outside the EEA looks unlikely. The new entity would therefore have been able to act independently with its competitors probably acting as "price takers" (following rather than challenging price increases).
The Commission carried out its investigation in close liaison with the US Federal Trade Commission (FTC). In a press release on Wednesday, the Commission argued that the "case … constitutes an example of co-operation and mutual understanding between US and EU competition authorities".