COMPETITION
COMMISSION News Release (41/08) issued by COI News Distribution
Service. 18 December 2008
The Competition
Commission (CC) has blocked the proposed acquisition by BOC
Limited (BOC) of the packaged chlorine business and assets of
Ineos Chlor Limited (Ineos Chlor). The principal use of packaged
chlorine is by the UK water industry for water disinfection.
In its final report published today, the CC has concluded that
the merger would result in a substantial lessening of competition
in the markets for the distribution of packaged chlorine in
cylinders and in drums in the UK.
This confirms the conclusion of the provisional findings report
which was published on 16 September 2008.
After carefully considering alternative remedies, including those
proposed by BOC and Ineos Chlor, the CC has concluded that
prohibition of the merger is an effective and proportionate
remedy, and that it is a lower-cost remedy than the alternatives considered.
Diana Guy, Inquiry Group Chairman, commented:
We found that the proposed merger would reduce the number of
competing distributors and would end the rivalry between BOC and
Ineos Chlor, which are currently each other's closest
competitors in these markets.
Our conclusion is that the merger would be anti-competitive and
would lead to customers paying higher prices and having less
choice than would otherwise be the case. We fully considered
alternative remedies which were advanced by the parties, including
one which held out the possibility of lower prices for customers
than if we simply prohibited the merger.
However, we were not convinced that these alternatives would be
effective nor that prices would indeed be lower. These
alternatives also involved risks and costs that would not arise if
the merger were prohibited.
The CC's reasoning can be found in its report which is
published on its website: http://www.competition-commission.org.uk.
Notes for editors
1. The Enterprise Act 2002 empowers the Office of Fair Trading
(OFT) to refer to the CC completed or proposed mergers, either
where the merger creates or enhances a 25 per cent share of supply
in the UK (or a substantial part thereof) or where the UK turnover
associated with the enterprise being acquired is over £70 million.
2. The inquiry was referred by the OFT on 29 May 2008. The CC has
a 24-week period in which it is required to publish its report,
which may be extended by no more than eight weeks if it considers
that there are special reasons why the report cannot be published
within that period. The CC extended the deadline for publication
of the final report to 7 January 2009 in order to consider complex
alternative remedies proposed by the parties.
3. The BOC/Ineos inquiry group consisted of four members-Diana
Guy, Alexander Johnston, Jill Hill and Professor Michael
Waterson-supported by the CC's staff.
4. Further information can be obtained from the CC's website
at http://www.competition-commission.org.uk/inquiries/current.
5. Enquiries should be directed to Rory Taylor on 020 7271 0398
or Siobhan Allen on 020 7271 0242