The European Commission has cleared under the EU Merger Regulation the proposed acquisition by Henkel KGaA of Germany of the entire adhesives and electronic materials business (the "A&E Businesses") that Akzo Nobel N.V. of The Netherlands recently acquired, when it bought Imperial Chemical Industries PLC of the UK (ICI). After a market investigation, the Commission concluded that the operation would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Henkel is listed on the Frankfurt stock exchange and on all of Germany’s regional exchanges. The company is active in the production and supply of laundry and home care products, cosmetics and toiletries, adhesives, sealants and surface treatment products.
The A&E Businesses, which comprise all assets and liabilities relating to industrial adhesives and electronic materials as well as certain industrial surface treatment products, currently form part of the National Starch division of ICI, which is now controlled by Akzo.
The parties' activities overlap in three areas: industrial adhesives, electronic adhesives/materials and, to a limited extent, industrial surface treatments.
Concerning industrial adhesives (as opposed to consumer or DIY adhesives) the Commission’s examination of the proposed transaction focused on the markets for automotive adhesives, bookbinding adhesives, non-woven hygiene adhesives, non-woven textiles adhesives and adhesives for disposable medical products.
The Commission's market investigation showed that the transaction would not raise competition concerns due to the fact that several alternative suppliers would remain active after the merger, both at EEA level and on potential national markets, and that barriers to entry are relatively low.
The transaction would not lead to competition concerns in the market for electronic adhesives either. Electronic adhesives are specifically designed for the manufacture of electronic components and systems. The Commission found that the market for electronic adhesives is global and that several large competitors are active on the market. Also, a majority of customers confirmed that they do business with several suppliers for electronic adhesives, rather than depending on a single supplier. [15 February 2008]