Completed acquisition by Brenntag UK Holding Limited of Albion Group Limited

Affected market: Sale of industrial chemicals

No. ME/2702/06

Please note that the full text of the decision can be downloaded by using the link on the right. What follows are extracts regarding the parties, the transaction, jurisdiction, third party views, assessment and decision.

The OFT's decision on reference under section 33(1) given on 28 November 2006. Full text of decision published 7 December 2006.

PARTIES

Brenntag UK Holdings Limited (Brenntag) is a distributor of commodity and speciality chemicals in the UK. It does not possess any manufacturing, distillation sites in the UK. Brenntag is a wholly owned subsidiary of Brenntag Holding GMbH & Co KG which, in turn, is part of the Brenntag Group. The Brenntag Group is an international distributor of 25,000 different bulk, commodity and speciality chemicals world-wide. The Brenntag Group also offers services related to storage, bottling, mixing and transport of chemical products as well as single-sourcing and supply management.

Albion Group Limited (Albion) is a distributor of 1,500 types of commodity and speciality chemical in the UK and Eire. It operates 15 distribution depots, two manufacturing sites and one distillation site across the UK. Albion's UK turnover of the business being acquired was £159 million in 2005.

TRANSACTION

Through this transaction Brenntag has acquired the entire issued share capital and therefore legal control of Albion. The parties completed the transaction on 23 June 2006. The statutory deadline is 28 November 2006.
 
JURISDICTION

As a result of this transaction Brenntag and Albion have ceased to be distinct. The UK turnover of Albion exceeds £70 million, so the turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act) is satisfied. The OFT therefore believes that it is or maybe the case that a relevant merger situation has been created.

THIRD PARTY VIEWS

The majority of third parties were not concerned by this transaction and some suggested that the merger would lead to distributive efficiencies that would be passed on to customers. One competitor suggested that on the basis of a narrower product scope defined by distribution of individual chemicals, the parties had high shares of supply in the distribution of certain chemicals. Third party views have been addressed.

ASSESSMENT

The parties overlap in the supply of speciality and commodity chemicals to industrial customers in the UK. At the EU and national level, shares of supply are not high, a number of distributors are present and the increments are [1-5] per cent and therefore do not give rise to any concerns.

If the relevant frame of reference were to be more narrowly defined on the basis of the supply of each individual chemical, the increments are below one per cent and therefore no competition concerns arise.

Consequently, the OFT does not believe that it is or may be the case that the merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.

DECISION

This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.

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