COMMISSION CLEARS AKZO NOBEL ACQUISITION OF COURTAULDS
The European Commission has cleared the acquisition of Courtaulds plc by Akzo Nobel N.V., subject to them addressing competition problems in aerospace coatings and sealants, which the operation threatened to create. The Commission's investigation found that Akzo and Courtaulds' activities are largely complementary, though their international activities overlap on coatings, chemicals and fibres. Either Courtaulds or Akzo will have to divest of their interests in aerospace coatings and sealants to eliminate domination of the markets. In aerospace coatings, Courtaulds and Akzo Nobel, through its ADAF joint venture with Dexter of the US, are the two leading suppliers in Europe. Their market share would amount to almost 80% in the European Economic Area (EEA). In the world market for aerospace sealants, which Courtaulds dominates with a market share of 65%, the concern was related to ADAF's participation in a project which seeks to develop, inter alia, sealants that could compete with Courtaulds' current products.
Following negotiations with the Commission, Akzo Nobel has given firm commitments to address these concerns, including either the divestment of the whole of Courtaulds' worldwide aerospace coatings and sealants operations to an independent purchaser, who will need to be approved by the Commission, or the sale of Akzo Nobel's complete stake in ADAF to its current partner Dexter. The Commission will give its consent to this remedy, if it is satisfied that it is equally effective in ensuring the competitive conditions in the EEA coatings market. When Akzo Nobel approaches the Commission with a concrete proposal as to the purchaser of the Courtaulds Aerospace Business, or as to the sale of ADAF to Dexter, the Commission will check that these proposals are sufficient to ensure fair competition.