29 June 2020

Nouryon’s acquisition of CP Kelco’s CMC business approved unconditionally by EC in Phase I

On 23 June 2020, the European Commission (EC) issued a decision approving unconditionally Nouryon’s acquisition of the carboxymethylcellulose’s (CMC) division of J.M.Huber, CP Kelco, a transaction with both horizontal and vertical implications.

Both parties are active in the manufacturing of carboxymethylcellulose (CMC), a cellulose ether of varying degrees of purity used across a range of industries, from regulated markets (food & beverage, pharmaceuticals) to consumer or industrial products (detergents, paper, oil drilling, etc.). CP Kelco also manufactures MCA and Caustic Soda, two of the main inputs in the production of CMC.

Working alongside Latham & Watkins and DLA Piper, RBB assisted the Parties in proceedings before the EC. RBB provided evidence on market definition (including supply-side substitution) and showed that Chinese and Turkish suppliers exert strong competitive constraints on sales to EEA customers. The EC concluded that the transaction was unlikely to lead to any anticompetitive effect, given that the Parties’ combined market shares would remain moderate post-transaction under any reasonable product market definition, and that there would remain a large number of alternative CMC suppliers for all purity grades and end applications, based both inside and outside the EEA.

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