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EU conditionally approves Mitsui Belchim acquisition

March 03/2021

MOSCOW (MRC) -- The European Commission has conditionally approved Japanese company Mitsui & Cos planned acquisition of a controlling interest in Belgian company Belchim Crop Protection, said Chemweek.

Mitsui agreed to the acquisition in December 2019. The approval is conditional on full compliance with a commitments package offered by Mitsui. The Commission commented that Belchim as well as Mitsui & Co through its subsidiary Certis Europe cater to high-value crops such as potatoes, vegetables and grapevines. Its investigation found that the proposed transaction would have reduced competition in two specific products: plant growth regulators (PGRs) used to prevent or control sprouting in stored potatoes; and paraffinic oils used to prevent or limit the spread of viruses in seed potatoes and flower bulbs.

In PGRs, the Commission says that since the 2020 EU ban of chlorpropham, both Mitsui and Belchim have been among very few suppliers that sell, or are about to sell, alternative products to chlorpropham in post-harvest potato PGRs markets in Denmark, Germany, Poland, Sweden, and potentially in Finland and Norway. The transaction would have led to high combined market shares in countries where Mitsui and Belchim compete. Also, it would have eliminated competition from Mitsui as a potential entrant in Finland and Norway. The Commission was therefore concerned that this would give rise to higher prices for potato PGRs in those countries.

On paraffinic oils, the Commission found that Mitsui is the main supplier of paraffinic oils for virus control in seed potato and flower bulb crops in the Netherlands. It also found that there were no suppliers other than Belchim who were likely to make a significant entry on those markets in the near future. As a result of the merger, Dutch farmers could have seen higher prices in paraffinic oils used to control viruses in seed potatoes and flower bulbs.
To address the Commission's competition concerns, Mitsui offered to transfer its distribution agreement and customer relationships for its potato PGRs in one or two packages (one for Germany and Poland and the other for the Nordic countries) to one or two remedy takers. If Mitsui cannot transfer both packages within a certain timeframe, it has offered to transfer instead the Belchim distribution agreement and customer relationships for its PGR product under the same terms.

Mitsui also offered to transfer to a remedy taker, the Belchim distribution agreement and other relevant data and agreements for its paraffinic oils for virus control in seed potatoes and flower bulbs in the Netherlands.
Both the potato PGRs and the paraffinic oil divestment businesses include access to brands and IP, application machinery and education and training. Mitsui cannot implement the acquisition of Belchim before the Commission has formally assessed and approved the transfer of each of the packages to remedy takers.

As MRC informed earlier, Mitsui Chemicals operated its naphtha cracker normally following a maintenance turnaround. Company resumed operations at the cracker on July 19, 2020. The cracker was shut for maintenance on June 11, 2020. Located in Osaka, Japan, the cracker has an ethylene capacity of 500,000 mt/year and a propylene capacity of 280,000 mt/year.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased.

Mitsui Chemicals is a leading manufacturer and supplier of value added specialty chemicals, plastics and materials for the automotive, healthcare, packaging, agricultural, building, and semiconductor and electronics markets. Mitsui Chemicals is a Japanese Chemicals company, a part of the Mitsui conglomerate. The company has a turnover of around 15 billion USD and has business interests in Japan, Europe, China, Southeast Asia and the USA. The company mainly deals in performance materials, petro and basic chemicals and functional polymeric materials.
Author:Anna Larionova
Tags:PE, LLDPE, LDPE, HDPE, Mitsui, Japan.
Category:General News
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