Mergers: Commission approves acquisition of Ferro by Prince, subject to conditions

(Source: European Commission)

The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Ferro by Prince, both active in the manufacturing of mineral-based chemicals and industrial additives and products. The approval is conditional on full compliance with commitments offered by Prince.

Prince and Ferro are both manufacturers and suppliers of porcelain enamel coatings and glass coatings in the European Economic Area (EEA).

Porcelain enamel coatings are used as an input for coating the surface of appliances, water-heaters, sanitary-ware and cookware. Glass coatings serve both functional and aesthetic purposes for a variety of application techniques including automotive glass, flat glass and container glass.

The Commission’s investigation

The Commission investigated concerns that the proposed acquisition would significantly reduce the level of competition with respect to the manufacture and supply of porcelain enamel coatings and glass coatings within the EEA. In particular, the combined entity would become the largest manufacturer and supplier of these products in the EEA.

The market investigation revealed that the transaction would reduce the numbers of suppliers in the market leaving insufficient choice for customers.

The Commission therefore found that the transaction, as originally notified, would have raised competition concerns with respect to:

the market for the manufacture and supply of porcelain enamel coatings in the EEA, and

the market for the manufacture and supply of glass coatings in the EEA overall, as well as on each of the plausible narrower markets identified, e. automotive glass, flat glass and container glass.

The proposed remedies

To alleviate these concerns and preserve competition in the market, Prince offered:

To divest Prince’s European porcelain enamel and glass coatings businesses, including the manufacturing facilities in Bruges, Belgium, and Cambiago, Italy, where all of Prince’s porcelain enamel coatings and glass coatings (except for forehearth colourants concentrates) for supply into the EEA are manufactured, and

To transfer its production unit of forehearth colourants concentrates located in Fenton, UK, to its production facility in Bruges.

These commitments fully remove the overlaps existing between Prince and Ferro’s activities in the markets where the Commission had identified competition concerns.

The Commission therefore concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.

Companies and products

Prince is a US company active globally in the manufacturing of mineral-based chemicals, minerals and industrial additives and products focussed on the development, manufacture and marketing of specialty products for applications in a variety of industries. Prince is ultimately controlled by affiliated funds managed by American Securities LLC.

Ferro is a US company active globally in the supply of (i) functional coatings for glass, metal, ceramic and other substrates, and (ii) colour solutions in the form of pigments and colorants, for a broad range of applications and industries. Ferro operates in various locations around the world, including Europe.

Merger control rules and procedures

The transaction was notified to the Commission on 26 November 2021.

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the EU Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). This deadline is extended to 35 working days in cases where remedies are submitted by the parties, such as in this case.

More information will be available on the Commission’s competition website, in the Commission’s public case register under the case number M.10341.

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