The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the caprolactones business of Solvay Interox Limited of the UK by the Swedish chemicals company Perstorp Holding AB (Perstorp). After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Perstorp is owned by the private equity firm PAI Partners SAS (PAI). The business to be acquired is active in the development, manufacture and sale of caprolactone monomer and its derivatives, thermoplastic polycaprolactones ('TPCL') and polycaprolactone aliphatic polyester polyols ('PCL') from a single production facility in the UK. These derivative products are used in a wide variety of applications such as coatings, adhesives, sealants and elastomers.
The proposed transaction does not give rise to any horizontal overlap as Perstorp is not active in the manufacture of caprolactone monomer and its derivatives. It would, however, result in a vertical link as Perstorp manufactures polyhydric alcohols which, amongst numerous other applications, are also used in limited quantities in the production of PCL.
The Commission concluded that this vertical link would not result in any anti-competitive effects as the merged entity would not have the ability to restrict its competitors' access to polyhydric alcohols. Firstly, as there are alternative suppliers of polyhydric alcohols, the merged entity would not be in a position to restrict its rivals' access to these raw materials. Secondly, as the production of PCL represents only a small proportion of overall polyhydric alcohol demand, even if the merged entity were to source all of its polyhydric alcohols internally, this would have only a limited effect on other suppliers of polyhydric alcohols. [10 January 2008]