15 July 1999 15:01 [Source: ICIS news]
LONDON (CNI)--The European Commission (EC) announced Thursday it has conditionally approved French specialty chemicals company Rhodia's acquisition of UK firm Albright & Wilson (A&W).
Because the merged entity would be a leading supplier in phosphate salts and surfactants, the EC said it will require Rhodia to make provisions to limit its presence in specific activities.
In relation to certain application markets for ammonium and calcium phosphates, the EC identified a competition problem in the European market, where both Rhodia and A&W are active. Rhodia has agreed to eliminate the overlap through a combination of trademark licensing, provision of customer lists, non-compete clauses and toll manufacturing agreements.
Both parties are active worldwide in the manufacturing and supply of phosphates (purified phosphoric acid and phosphates salts), surfactants and phosphorus derivatives and acrylics, said the EC. The EC's investigation concluded that the relevant geographic market for phosphate grades and surfactants is essentially Europe-wide and but the merger caused competitive concerns over ingredients in fire extinguisher powders, fermentation product agents, oral care abrasives and leavening agents.
Rhodia has agreed to deal with the competition concerns by: entering into a toll manufacturing agreement with a viable and independent third party for a quantity of ammonium and calcium phosphate equal to its current sales on the European market; granting a licence for its trademarks; and, providing the third party with a customer list and not to compete with the third party for a period agreed with the EC.
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