Oct 28, 2016 - Alteo ARC, Alufin and Imerys are all active in the production and supply of various specialty aluminas in the European Economic Area (EEA). The Commission had concerns that the proposed transaction, as initially notified, would have created significant overlaps between the activities of the companies in certain types of specialty aluminas. The commitments offered by the parties address these concerns.
The Commission’s competition concerns
The Commission’s preliminary investigation found that the proposed transaction would lead to a large combined market share on the market for white fused alumina for refractory and for abrasive applications (including its sub-segment bubble alumina). Motim is the only major EEA based competitor. Furthermore, the investigation showed that Imerys and Alteo had been competing strongly on this market prior to the transaction.
The Commission had concerns that, following the transaction, Motim and other suppliers from outside the EEA would be unable to exercise sufficient competitive constraint on the merged entity to avoid price increases for white fused alumina. Customers also raised concerns about the risk of price increases following the loss of one of the main suppliers in a concentrated market.
The Commission found no competition concerns with respect to other products concerned by the transaction, such as brown fused alumina. The investigation showed that the market shares of the merged entity in these products would be modest and that several alternative suppliers, including outside of Europe, would continue operating.
The proposed commitments
To address the Commission’s competition concerns, Imerys offered to divest Alteo ARC’s entire white fused alumina business and related businesses located in Alteo’s plant in La Bathie, France.
The divestment entirely removes the overlap between the activities of the two companies on the markets for white fused alumina and bubble alumina for refractory and abrasive applications, both in the EEA and at the global level. This would fully preserve the intensity of competition in these markets.
Therefore, the Commission concluded that the transaction, as modified by the commitments, would raise no competition concerns. The Commission’s approval is conditional upon full compliance with the commitments.
The companies and products
Alteo ARC and Alufin GmbH Tabularoxid are both part of Alteo of France, which is a fully integrated producer and supplier of specialty alumina used in abrasive and refractory applications. Alteo ARC operates two alumina plants in La Bathie and Beyrède in France and Alufin one plant in Teutschenthal in Germany.
Imerys is a French based multinational mining company active in, among others, the production and supply of specialty alumina used in abrasive and refractory applications.
White fused alumina is a specialty alumina that can be distinguished from other types of specialty alumina due to differences in product characteristics, end uses and price. Bubble alumina is a sub-segment of white fused alumina that has a lower density and is a higher-value product.
Merger control rules
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
The transaction was notified to the Commission on 9 September 2016 after a request by the companies that the Commission should review the transaction although it did not meet the turnover thresholds of the EU Merger Regulation. This is possible when a transaction would be notifiable in at least three Member States and provided that none of the Member States concerned disagrees.
More information on the case is available on the Commission’s competition website, in the public case register under the case number M.8130.
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