The European Commission has cleared the way for a 4.3 billion euro (US$5.9 billion) joint venture between Ineos Group AG and Solvay SA, Europe’s two largest manufacturers of PVC.
The joint venture, announced last year, will enable Ineos and Solvay to reduce costs.
“PVC is an important raw material used in the construction sector and in many other industries,” said E.U. Competition Commissioner Joaquin Almunia in a statement. “The proposed commitments will ensure that the transaction will not result in higher prices to the detriment of businesses and consumers in Europe.”
The approval is conditional upon the divestiture of certain of Ineos’ suspension polyvinyl chloride plants and related assets, the statement continued. “This divestment will provide its purchaser with a self-standing S-PVC business capable of competing with the new joint venture,” the statement continued. “The Commission had concerns that the transaction, as originally notified, would have enabled the merged entity to raise prices for S-PVC in North West Europe…since it combined the two largest suppliers in these markets. The commitments offered address these concerns.”