Nouryon Chemicals International B.V. v CP Kelco Oy (LM170Mar20) [2020] ZACT 24; [2020] 2 CPLR 786 (CT) (24 June 2020)

Nouryon Chemicals International B.V. v CP Kelco Oy (LM170Mar20) [2020] ZACT 24; [2020] 2 CPLR 786 (CT) (24 June 2020)

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in the market for CMC in South Africa. The merged entity's market share accretion would remain below 35%, and the only local producer, Senmin, would continue to face competition from imports. No concerns were raised by intermediaries, and the merging parties have no employees in South Africa, eliminating any risk of redundancies. Existing supply and distribution agreements will continue, and no public interest concerns arise. Accordingly, the Tribunal approved the merger without conditions.

Citation
[2020] ZACT 24
Parties
Applicant: Nouryon Chemicals International B.V.; Respondent: CP Kelco Oy; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 June 2020
Case Number
LM170Mar20
Procedural Posture
Merger Approval / Final Determination
Outcome
Merger approved unconditionally.
Judges
E Daniels, A Ndoni, F Tregenna
Legal Topics
Large Merger, Market Share Accretion, Public Interest, Vertical and Horizontal Overlap, Unconditional Approval
Competition Law Large Merger Market Share Accretion Public Interest Vertical and Horizontal Overlap Unconditional Approval

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Parties

Nouryon Chemicals International B.V.

Applicant

CP Kelco Oy

Respondent

Competition Commission

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed merger between Nouryon Chemicals International B.V. and CP Kelco Oy would substantially prevent or lessen competition in the market for carboxymethyl cellulose (CMC) in South Africa.
  2. 2 Whether the merger raises any public interest concerns, including employment effects or supply agreements.

Ratio Decidendi

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in the market for CMC in South Africa. The merged entity's market share accretion would remain below 35%, and the only local producer, Senmin, would continue to face competition from imports. No concerns were raised by intermediaries, and the merging parties have no employees in South Africa, eliminating any risk of redundancies. Existing supply and distribution agreements will continue, and no public interest concerns arise. Accordingly, the Tribunal approved the merger without conditions.

Court Disposition

Merger approved unconditionally.

Orders

  • The large merger between Nouryon Chemicals International B.V. and CP Kelco Oy is approved without conditions.