23 April 2013 18:40 [Source: ICIS news]
MEDELLIN, Colombia (ICIS)--The chief of Brazil’s Administrative Council for Economic Defence (CADE) has recommended blocking Brazilian chemical firm Oxiteno’s acquisition of the Uruguay’s largest chemical firm, American Chemical, sources in the market said on Tuesday.
The General Superintendence’s opinion stated that the acquisition would harm competition in the sodium laureth sulphate market, a chemical substance applied in cleaning and personal care products such as detergents, shampoos and liquid soap.
Both companies produce and sell the product in the countries that are part of Mercosul, the Southern Common Market. After the merger, the firms would hold a market share of more than 60%, according to the CADE.
The council also expressed concerns regarding the alcohol ethoxylate market, the main input for the production of sodium laureth sulfate, given that Oxiteno is the only producer of this input in Brazil.
The case will now be reviewed by CADE’s tribunal, which is responsible for the final decision.
Oxiteno closed on its $74m (€57m) acquisition of Uruguay-based American Chemical in November 2012.
American Chemical owns a chemical plant in the capital of Montevideo, with a production capacity of 81,000 tonnes of chemicals used for home, personal care and leather industries.
The company is a subsidiary of Ultrapar.
($1 = €0.77)
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