Mergers: Commission approves acquisition of US water chemical treatment company Nalco by US chemical company Ecolab
Brussels- The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Nalco Holding Company, a US water chemical treatment company, by Ecolab, another US chemical company. The proposed transaction allows Ecolab to broaden its core competencies in cleaning and sanitizing products, in particular in the food and beverages industry, by strengthening its presence in water treatment products, without raising competition concerns. Indeed, the Commission found that the merged entity will continue to face sufficient competition from several strong players.
The Commission examined the competitive effects of the proposed acquisition in the affected markets for the supply of water treatment chemicals for cooling and boiler applications. The investigation clearly established, that the merged entity will continue to face competition from a number of strong competitors.
The Commission also assessed the vertical relationships arising from the fact that Nalco supplies water treatment chemicals to Ecolab’s competitors in the water treatment business. The Commission finally examined possible conglomerate effects arising from the transaction, in particular since some of the parties’ activities involve a range of products generally purchased by the same set of customers.
The Commission’s investigation revealed that the merged entity will not have the market power to foreclose its rivals and that other competitors would be able to react to any foreclosure attempt.
The Commission therefore concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA)1 or any substantial part of it.
The transaction was notified to the Commission on 4 October 2011.
Companies and products
Ecolab is active internationally in the cleaning and sanitizing industry and has a minor presence in the water treatment business. Nalco is also active globally in the water chemical treatment industry.
Merger control rules and procedures
The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation). Its duty is to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of 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).
A non-confidential version of today’s decision will be available at:
Amelia Torres (+32 2 295 46 29)
Marisa Gonzalez Iglesias (+32 2 295 19 25)
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