07 August 2008 16:32 [Source: ICIS news]
LONDON (ICIS news)--The European Commission (EC) has opened an in-depth investigation into the planned acquisition of Dutch chemicals manufacturer DSM Special Products (DSP) by ?xml:namespace>
The EC said Arsenal, which controlled Velsicol Chemical Corp, and DSP were both active in the manufacture of benzoic acid and sodium benzoate.
Velsicol also manufactures plasticisers, a product derived from benzoic acid.
“The commission’s initial market investigation found that the proposed transaction raises serious doubts as to its compatibility with the single market as the merged entity would potentially have very high market shares on the benzoic acid and sodium benzoate markets,” said the EC in a statement.
“In addition, the merged entity would be present both on the market for benzoic acid and the downstream market for benzoate plasticisers, thus raising concerns that it would be able to use its market position on one market to decrease competition on the related market,” it added.
The EC now has until 11 December to take a final decision on whether the concentration would significantly impede effective competition within the European Economic Area (EEA) or a substantial part of it.
DSM said in March that it expected to realise a net book profit after tax of just above €10m ($15.4m) on the sale.
Benzoic acid is used as an antimicrobial preservative in food and drinks, in animal feed, in pharmaceutical products, to produce other chemicals, in paints and coatings and in personal healthcare.
Sodium benzoate is used primarily as an antimicrobial preservative in food and soft drinks, but is also used in pharmaceutical products, the automotive industry, personal care, household cleaning products and pyrotechnics. Plasticisers are mainly used in the manufacture of polyvinyl chloride (PVC).
($1 = €0.65)
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