BRUSSELS – Based on the EU Merger Regulation, the European Commission has approved Evonik's acquisition of Huber Silica. The decision is conditional on the divestment of some of both companies' activities related to precipitated silica, a chemical used in applications that include paints and coatings.
Evonik and Huber Silica are both manufacturers of specialty chemicals, including precipitated silica. This is used to make products such as toothpaste, paper, animal feed, tires, and shoe soles, but also in defoamers and paints and coatings.
The Commission's investigation concluded that the transaction, as notified, raised competition concerns in the markets for precipitated silica for toothpaste and for defoamer applications; and hydrophobic precipitated silica, which is used in several products including defoamers, paints and coatings, and food and feed additives. This is notably due to the relatively high combined market shares of the merged entity and the limited number of alternative suppliers in each of these markets.
To address the competition concerns, Evonik and Huber Silica offered to divest the following activities:
- Evonik's precipitated silica business for dental applications in Europe, Middle East and Africa;
- Huber Silica's precipitated silica business for defoamer applications in the European Economic Area (EEA); and
- Huber Silica's hydrophobic precipitated silica business in the EEA.
The divestment includes the full transfer of the production technology to a suitable purchaser's production facilities. During the transfer, the parties commit to provide the purchaser with full technical support and a transitional supply agreement.
To ensure the success of the production transfer and the effectiveness of the commitments, the purchaser of the assets needs to be an established producer of precipitated silica with an existing market presence in the EEA.
The Commission concluded that the proposed merger, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.