The OFT has referred to the Competition Commission (CC) the anticipated joint venture between Kemira GrowHow Oyj and Terra Industries Inc.
This joint venture combines the parties' respective UK and Irish fertiliser and process chemicals businesses. The OFT has decided that the test for reference is met in relation to the supply of the following process chemicals: nitric acid, anhydrous ammonia, aqueous ammonia, liquid carbon dioxide and ammonium nitrate for non-agricultural applications to customers in the UK.
The OFT considered this joint venture creates a monopoly in certain UK process chemicals markets with high entry barriers. However, the transaction raises no competition concerns in the fertiliser market, which is the principal business of the parties to the joint venture. The OFT seeks to resolve concerns in secondary markets that arise from a larger deal that is otherwise unproblematic through undertakings in lieu of a reference to the CC. The OFT concluded that the proposed remedies offered might restore a second player in these markets, but one dependent for its supplies on its only other competitor, and therefore increased transparency and a risk of coordinated effects. It felt appropriate in this case for the CC to examine the substantive issues and questions of remedy design in greater depth.