26 March 2013 19:10 [Source: ICIS news]
LONDON (ICIS)--The European Commission has opened an in-depth investigation into the planned takeover by ?xml:namespace>
The Commission fears that the deal would remove the only competing producer of naphthenic base oils in the European Economic Area (EEA), it said.
Under the deal, first announced in 2011, Stockholm-based specialty oils refiner Nynas would lease for 25 years Shell’s base oil plant and related refinery assets at Hamburg, with Nynas rebuilding the site into a 330,000 tonne/year specialty oils refinery.
The Commission said that its initial investigation showed that with the acquisition, no other competitor would remain to supply naphthenic oils for use in some end applications such as industrial rubber, fertilizers and defoamers in the EEA.
With respect to other segments – including greases, metalworking fluids or cold-set inks and transformer oils – the few remaining competitors importing into the EEA may not exercise a sufficient competitive constraint, the Commission said.
“The Commission’s initial investigation revealed possible competition concerns in the markets for naphthenic base oils, naphthenic process oils and transformer oils where the merged [Nynas] entity would have very high market shares in the EEA,” it added.
The Commission has 90 working days, until 8 August 2013, to take a final decision on whether the merger would significantly impede effective competition in the EEA, it said.
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