Brussels, 30/09/2003 (Agence Europe) - As previously announced, the European Commission has granted clearance under the Merger Regulation to the proposed acquisition of French aluminium producer Pechiney by Alcan of Canada (EUROPE yesterday p 18). The Commission's review highlighted serious concerns in a number of markets, but Alcan was able to address such concerns by offering to divest a number of businesses. The two companies are active in the aluminium sector. Their activities include bauxite mining, alumina refining and power generation as well as aluminium smelting, manufacturing and recycling. Both have research and development departments and also make fabricated products, most importantly packaging, including aerosol cans, cartridges and flexible packaging. If successful, the bid would create the number one aluminium company in terms of global turnover, followed closely by current world leader Alcoa. The Commission's market investigation identified concerns in the overall market for flat-rolled aluminium products (FRPs) and particularly with regard to beverage and food can stock as well as beverage can end stock (can tops). It should be noted that these markets are already concentrated and the combination of Alcan and Pechiney would result in high to very high market shares. The investigation also highlighted concerns in the markets for aluminium aerosol cans and aluminium cartridges that require rigid packaging. There were also serious doubts with regard to three technology markets (the licensing of alumina refining technology, smelter cell technology and anode baking furnace technology) where the transaction would combine the two leading active licensors in the aluminium metal production chain. In order to meet the Commission's regulatory concerns, Alcan offered to: 1) Divest either its 50% share in AluNorf and its Göttingen and Nachterstedt rolling mills or Pechiney's Neuf-Brisach, Rules foil mill and, at the purchaser's option, the Annecy rolling mill. Alcan's Latchford casting house can also be added to either the AluNorf or Neuf-Brisach packages at the purchaser's option. 2) Eliminate the overlap in relation to the two companies' activities in aluminium aerosol cans and aluminium cartridges; 3) Continue offering licenses for the technologies referred above at terms and conditions comparable to those applied prior to the transaction, and divest Alcan's anode baking furnace technology altogether. The Commission agreed to these conditions which it thinks will re-establish healthy competition in the sector.