Tyre industry. The Commission approves a new merger

On 15 January 2020, the Commission has approved, under the EU Merger Regulation, the proposed acquisition of Omnova by Synthomer, notified on 15 November 2019. Omnova, headquartered in the US, and Synthomer, headquartered in the UK, both produce specialty chemicals for use in a variety of applications. In particular, they produce vinyl pyridine latex (“VP Latex”), which is primarily used by tyre manufacturers to provide safer and more solid tyres to the automotive industry.

The Commission had concerns that the transaction, as originally notified, would have reduced competition on the market for the supply of VP Latex. Specifically, after a market investigation the Commission stated that the market for the supply of VP Latex in the European Economic Area (EEA) is highly concentrated, as Synthomer and Omnova are the only two players with production capacity and the market is characterized by high barriers to trade across regions. Consequently, the acquisition would have likely led to higher prices, reducing both the choices in products and the quality of services provided to customers.

Therefore, in order to address the Commission’s concerns, Synthomer offered to divest its global VP Latex business, including technology, brands, and manufacturing equipment to a manufacturer with the proven knowledge regarding the relevant chemistry. Conditional upon full compliance with the commitments, the Commission has approved the merger, since the entire overlap between Synthomer and Omnova‘s activities in the VP Latex sector as well as the competition concerns would default. 

Marco Stillo