CC provisionally rules against AkzoNobel / Metlac merger
20 Sep 2012
The CC has provisionally found that the proposed acquisition by Akzo Nobel N.V. (AkzoNobel) of Metlac Holding S.r.l. (Metlac Holding) would result in a substantial lessening of competition (SLC) in the supply of metal packaging coatings in the UK.
AkzoNobel has an existing stake of 49 per cent in Metlac Holding through its subsidiary Akzo Nobel Coatings International B.V. (ANCI). The remaining 51 per cent is owned by members of the Bocchio family. Metlac Holding owns 55.56 per cent of Metlac S.p.A. (Metlac), the operating company. AkzoNobel also owns the remaining 44.44 per cent of Metlac. Notwithstanding these shareholdings, AkzoNobel does not currently have sole control of Metlac.
ANCI has a call option to buy the remaining shares in Metlac Holding, which it has decided to exercise. The merger would see AkzoNobel assume sole control of the company.
AkzoNobel and Metlac both manufacture and supply metal packaging coatings. These are used, for example, in the production of beverage and food cans. The merging parties are two of the four main suppliers of metal packaging coatings in the European Economic Area (EEA) and between them supply between 40 and 55 per cent of metal packaging coatings for beer and beverage metal packaging in the EEA and between 35 and 50 per cent of metal packaging coatings for food, caps and closures and general line metal packaging in the EEA.
The CC received a number of third party concerns relating to the loss of Metlac as a competitor. Evidence considered by the CC shows that Metlac is considered by customers to be especially price-competitive and that it represents a significant competitive constraint to AkzoNobel.
Roger Witcomb, CC Chairman and Chairman of the AkzoNobel/Metlac inquiry, said:
‘Metlac competes strongly with Akzo Nobel, the leading player, in these markets. A number of customers indicated that Metlac is a significant competitive force due to its low pricing, strong product quality and innovation and that its removal would eliminate a significant competitive constraint to Akzo Nobel and could therefore result in price increases.’
The CC has also published a Notice of Possible Remedies to remedy the harm to competition, which includes a remedy preventing AkzoNobel from exercising its call option. The full provisional findings report will be published shortly.
The CC would like to hear from all interested parties in writing about the provisional findings by 10 October 2012 and Notice of Possible Remedies by 3 October 2012. To submit evidence, please email matthew.weighill@cc.gsi.gov.uk or write to:
Matt Weighill
Inquiry Manager, Akzo/Metlac merger inquiry
Competition Commission
Victoria House
Southampton Row
LONDON
WC1B 4AD
Notes for editors
1. The CC is an independent public body, which carries out investigations into mergers, markets and the regulated industries.
2. The members of the Akzo Nobel and Metlac Inquiry Group are: Roger Witcomb (CC Chairman and Inquiry Group chairman), Ian Jones, Anthony Stern and Katherine Holmes.
3. The Office of Fair Trading (OFT) referred the case on 23 May 2012 and the CC has been asked to decide whether the acquisition may be expected to result in an SLC in any market or markets for goods or services in the UK. The statutory deadline for the publication of the CC’s final report is 6 November 2012.
4. The Enterprise Act 2002 empowers the OFT to refer to the CC completed or proposed mergers for investigation and report which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or where the UK turnover associated with the enterprise being acquired is over £70 million.
5. The CC has a 24-week period in which it is required to publish its report, which may be extended by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.
6. Further information on this inquiry, including the terms of reference and other key documents, as well as on the CC and its procedures, including its policy on the provision of information and the disclosure of evidence, can be obtained from the CC website at: www.competition-commission.org.uk.
7. Enquiries should be directed to Rory Taylor or Siobhan Allen or by ringing 020 7271 0242.
