EUROPEAN COMMISSION HAS CONDITIONALLY APPROVED CROP PROTECTION MERGER

04/03/2021

 

European Commission cleared the acquisition of Belchim by Mitsui subject to conditions.

Belchim and Mitsui both distribute third-party crop protection products and supply their own formulated products for high-value crops such as potatoes, vegetables and vines. For such crops, both companies sell a wide range of products that are mostly based on off-patent active ingredients (AI). In the European Economic Area (EEA), Mitsui is mainly active in crop protection through its subsidiary Certis, based in the Netherlands.

Commission determined that the proposed transaction, as originally notified, would have reduced competition in the “plant growth regulators” (PGR) and           “paraffinic oils” markets, which are submarkets of “crop protection market”. Commission stated that the transaction would have led to high combined market shares in countries where Mitsui and Belchim already compete and also eliminate competition in countries where from Mitsui as a potential entrant. The Commission was therefore concerned that this would give rise to higher prices for potato PGRs in those countries. 

In addition, Commission found that Mitsui is the main supplier of paraffinic oils for virus control in seed potato and flower bulb crops in the Netherlands and there were no suppliers other than Belchim who were likely to make a significant entry on those markets in the near future. The Commission was therefore concerned that the transaction would remove competition from Belchim and that the merged company would have maintained very high market shares in the Netherlands.

To address the Commission's competition concerns, Mitsui offered the following commitments:

• To transfer the Mitsui 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.
• 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.

Commission determined that these commitments fully remove the overlaps between Mitsui and Belchim in the markets where the Commission had identified competition concerns. Therefore, Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in the EEA and approved the transaction.

(European Commission – 11.02.2021)

NAZALI TAX & LEGAL info@nazali.com

This document provides general information on the subject and does not constitute a legal opinion or recommendation. Consulting a specialist is recommended before taking an action. No claim arising from the content of or relating to this document can be asserted against NAZALI.