6 June 2023

Norsk Hydro/Alumetal: Alleged “green killer acquisition” unconditionally cleared

On 4 May, the European Commission (“EC”) unconditionally approved Hydro’s acquisition of Alumetal following a Phase II investigation.

Both parties are active in the production of aluminium foundry alloys (“AFAs”) – a semi-finished aluminium product used mainly by the automotive industry to cast auto parts – but use distinct production processes. Hydro is a primary supplier producing AFAs from raw material while Alumetal is a secondary supplier producing AFAs from recycled material.

The EC opened its in-depth investigation on the grounds that the merger may amount to a “green killer acquisition” where “by acquiring Alumetal, Norsk Hydro may reinforce its leading position as a supplier of aluminium foundry alloys, and may eliminate a growing competitor able to bring cheaper and advanced recycled aluminium products to the market” (see EC Phase II opening press release).

RBB supported Hydro during the Phase II proceedings alongside law firms O'Melveny & Myers LLP and Freshfields Bruckhaus Deringer. RBB notably provided a stand-alone economic report in the beginning of Phase II that assessed closeness of competition between the parties. Having reviewed a broad range of evidence on the characteristics of the AFAs supplied by each party in response to customers’ requirements, the costs associated with producing such products, and the extent to which the parties lose sales to one another, the report concluded that the parties do not exert a significant competitive constraint on each other. All findings were largely confirmed by the EC’s Phase II market investigation.

More details about the case can be found on the EC website.

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