BRUSSELS, BELGIUM: The European Commission has cleared under the EU Merger Regulation the proposed acquisition of certain refinery assets of Shell Deutschland Oil GmbH located in Hamburg/Harburg, Germany by Nynas AB of Sweden.
The Commission’s in-depth investigation showed that a closure of the Harburg refinery assets is the most likely scenario in the absence of the proposed transaction. This would significantly reduce the production capacity in the European Economic Area (EEA) market for naphthenic base and process oils. The closure would lead to higher prices for European consumers.
According to the Commission, after the transaction, the merged entity will remain the only naphthenic base and process oil producer. During the in-depth investigation Shell demonstrated that it would not continue to operate the Harburg refinery, as in its current set-up it is economically unsustainable. The business model that will allow Nynas to operate the Harburg plant is different from the current one and requires significant investment.
The Commission’s in-depth investigation also showed that there are, other than Nynas, no alternative buyers for the acquisition of the Harburg refinery assets. Therefore, the most likely alternative scenario to the proposed transaction would be the closure of the Harburg refinery. The Commission also found that the acquisition by Nynas has positive effects on competition. The Commission therefore concluded that the transaction would not raise competition concerns.
“If this acquisition did not take place, the Harburg plant would simply close down, dramatically reducing production capacity in Europe for a number of specific oil products. We authorised this acquisition because it is the only way to avoid a price increase for consumers,” said Joaquin Almunia, Vice President in charge of competition policy, European Commission.
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