Competition concerns for Univar’s acquisition of Quaron

trucks on motorway.jpgThe news that global chemical distributor, Univar, is to purchase Dutch-owned Quaron could raise some eyebrows amongst competition authorities in France, according to Marc Fermont of consultancy Districonsult.

He says the merger would leave only two major chemical distributors in France, both with revenues above E500m.

As he says, “the French market for industrial chemicals could be moving from an oligopolistic position with three main suppliers, namely Brenntag, Univar and Quaron, to a duopoly with only two mega suppliers. Other distributors like Beauseigneur, Platret, Gaches Chimie, Caldic or Ciron only play a limited regional role with considerably lower revenues in comparison with the two giants. To sum it up, the French industrial chemical market which is already the most consolidated in Europe, could eventually be served by what will be in fact a true duopoly.

 

He concludes: “This [merger] could be realized if the French competition authorities authorize the further consolidation of the French industrial chemical market, which in our view ought not to be taken for granted.

 

In the same article, Fermont highlights the impending results of anti-trust investigations in European chemical distribution which have been going on since 2007 and involve Univar and Brenntag. “In case these on-going investigations, partly based on pleas for clemency filed by the main players in 2007, additionally reveal that various forms of illegal cooperation existed between the two leaders, the French competition authorities might have additional reasons to be reluctant to give clearance to the merger.”

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