The European Commission has today cleared the way for INEOS to acquire BP's Ethylene Oxide/Ethylene Glycol business in Dormagen, Germany
The European Commission has today cleared the way for INEOS to acquire BP's Ethylene
Oxide/Ethylene Glycol business in Dormagen, Germany. Following an in-depth
investigation the Commission has concluded that the proposed acquisition would not
significantly impede competition in the European Economic Area (EEA) or a substantial
part of it.
The decision was welcomed by INEOS. "We are pleased that the Commission has
reached this conclusion," commented Hans Casier, CEO INEOS Oxide. "We have always
maintained that although INEOS would have a high market share, competition would not
be significantly impeded as a result of the acquisition of the business. A view that has been
confirmed in the announcement made today."
"This addition of the Ethylene Oxide business at Dormagen would help INEOS Oxide to
continue to meet the needs of its customers. Our focus now is on a succesful acquisition of
the business and seamless transition into the INEOS Group of companies," he added.
In its statement the Commission commented that the combined entity would have high
market shares in the merchant market for ethylene oxide. However, the investigation
revealed that competitors would have the ability and the incentive to react to potential price
increases by INEOS. In addition, substantial new capacity for ethylene glycols is being
commissioned in the Middle and Far East, producing ethylene glycols at substantially
lower costs than in Europe. As a result, imports of ethylene glycols into the EEA market
will increase. Given the number of market players and their ability to divert part of their
ethylene glycols production into the ethylene oxide merchant market, the Commission
concluded that there would be sufficient alternative suppliers.
The BP Dormagen Business consists of a plant located in Köln/Dormagen (Germany)
manufacturing ethylene oxide and ethylene glycols and is currently controlled by BP.
Ethylene oxide is a colourless gas, produced by the partial oxidation of ethylene and is
hazardous, highly inflammable, explosive, toxic and carcinogenic. Ethylene oxide is used
for the production of glycols, mainly used in the textile industry, and as an intermediate for
the production of other derivatives, such as detergents, refrigerants or personal care
among.
It is expected that the acquisition will complete by August 31, 2006. The purchase price
for the Business will be $125 million less any closing adjustments.