Press Release: Mergers: Commission opens in-depth investigation into Arsenal’s proposed acquisition of chemical manufacturer DSP

The European Commission opened an in-depth investigation under the EU Merger Regulation into the planned acquisition of the Dutch manufacturer of basic chemicals DSP by US equity company Arsenal, which controls Velsicol Chemical Corporation. Both Velsicol and DSP are active in the manufacture of benzoic acid and sodium benzoate. Velsicol also manufactures plasticisers, a product derived from benzoic acid. The Commission’s initial market investigation found that the proposed transaction raised serious doubts as to its compatibility with the Single Market as the merged entity would potentially have very high market shares on the benzoic acid and sodium benzoate markets. In addition, the merged entity would be present both on the market for benzoic acid and the downstream market for benzoate plasticisers, thus raising concerns that it would be able to use its market position on one market to decrease competition on the related market. The decision to open an in-depth inquiry does not prejudge the final result of the investigation. The Commission now has 90 working days (until 11 December 2008) to take a final decision on whether the concentration would significantly impede effective competition within the European Economic Area (EEA) or a substantial part of it.