Ineos-Solvay PVC Joint Venture Gets EU Merger ComplaintAoife White
Ineos Group Holdings Ltd. and Solvay SA, Europe’s two biggest makers of polyvinyl chloride, received a complaint from European Union merger regulators over concerns about a 4.3 billion-euro ($5.8 billion) joint venture of their PVC units.
“We’ve received the statement of objections,” Richard Longden, a spokesman for Ineos based in Rolle, Switzerland, said in a telephone interview today. “It’s part of due process and we continue to work with the European Commission.”
The authority opened an in-depth investigation into the deal in November, saying it would remove a key competitor for bleach and suspension-PVC resin used to make pipes and window frames. The EU has to rule on the transaction by April 4.
The proposed combination, announced last year, would allow the companies to cut costs in areas from transport to marketing and raise profitability amid a European industry suffering from inflated raw material and energy costs. The PVC market is facing overcapacity and weak demand in Europe, prompting companies in the labor-intensive industry to explore deals. Solvay has said it plans to exit the PVC venture at a later stage.
Caroline Jacobs, a spokeswoman for Brussels-based Solvay, said the company would thoroughly examine the EU’s objections, which she said was the “next normal step” in the EU review. Solvay fell 1.7 percent to 104.35 euros at the 5.35 p.m. close of trading in Brussels.
Receiving a statement of objections doesn’t prevent a deal from winning EU approval. Companies can overcome EU concerns by defending transactions in writing or at an oral hearing and can propose concessions to eliminate EU concerns before the agency makes a final decision on whether a bid would damage competition.
The deal will combine the two leading suppliers of S-PVC in northwest Europe and of sodium hypochlorite bleach in Belgium and Netherlands, the EU said in a statement last year. The S-PVC market in Europe is worth 3.2 billion euros, it said.