01 July 2010 15:49 [Source: ICIS news]
LONDON (ICIS news)--Total Petrochemicals has welcomed the European Commission’s (EC) green light to the proposed sale of Polimeri's polystyrene business at Feluy, Belgium, the French energy major said on Thursday.
In February Total Petrochemicals announced that it intended to buy the polystyrene (PS) production lines of Polimeri Europa, with the exception of the expandable PS (EPS) unit reactors, following a decision by the Italian petrochemical company in October 2009 to bring its PS and EPS service contract with Total to an end and cease activities at the Feluy facility.
However, before any deal could take place, the European Competition Authorities would have to approve the deal under EU merger regulation.
On the 31 June, the Commission cleared the acquisition and said that despite the fact that both parties produced polystyrene, its investigation showed that the transaction would lead to a relatively small overlap and the combined entity would continue to face several competitors.
“The transaction would give raise to a vertical link as Total also produces styrene, which is the main input for the production of polystyrene. This vertical relationship is, however, limited,” the Commission said.
“The Commission therefore concluded that the proposed concentration would not raise competition concerns,” it added.
A Total spokesperson said that the EC's decision was good news.
"We have the firm intention to buy the facilities from Polimeri," the spokesperson added.
If the deal does go ahead, Total Petrochemicals would continue PS production on behalf of Polimeri until the end of September 2011, with the exception of the expandable polystyrene unit reactors, which Polimeri requested would close in September 2010.
The spokesperson said that as Total was unable to buy the total activities at Feluy, it meant staff numbers would be cut, and negotiations were ongoing with trade unions. However the number of jobs lost was not disclosed.
An official statement would be provided at the point when everything was completed, the spokesperson added.
The three PS units, which are owned by Polimeri Europa but operated by Total Petrochemicals Feluy staff, produce a total of 200,000 tonnes/year.
Polimeri Europa has two EPS production facilities in Europe, both with a capacity of 35,000 tonnes/year, at Feluy in ?xml:namespace>
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