The European Commission has approved under the EU Merger Regulation Evonik’s acquisition of Huber Silica. Evonik and Huber Silica are both manufacturers of specialty chemicals, including precipitated silica. The decision is conditional on the divestment of some of both companies’ activities related to precipitated silica, a chemical used in tires, toothpaste, defoamers, paints and coatings. The Commission’s investigation concluded that the transaction, as notified, raised competition concerns in the markets for: (i) precipitated silica for toothpaste and for defoamer applications; and (ii) hydrophobic precipitated silica, which is used in several products including defoamers, paints, coatings, food and feed additives. This is notably due to the relatively high combined market shares of the merged entity and the limited number of alternative suppliers in each of these markets.
The proposed remedies:
To address the competition concerns, Evonik and Huber Silica offered to divest the following activities:
• Evonik’s precipitated silica business for dental applications in Europe, Middle East and Africa.
• Huber Silica’s precipitated silica business for defoamer applications in the European Economic Area (EEA).
• Huber Silica’s hydrophobic precipitated silica business in the EEA.
To ensure the success of the production transfer and the effectiveness of the commitments, the purchaser of the assets needs to be an established producer of precipitated silica with an existing market presence in the EEA.
The Commission therefore concluded that the proposed merger, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.
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Market Analysis - Monthly Report - June, 2020 - Pharmaceutical