CC Rules Against AkzoNobel-Metlac Merger
The CC has provisionally found that the proposed acquisition by Akzo Nobel N.V. (AkzoNobel) of Metlac Holding S.r.l. (Metlac Holding) would result in a substantial lessening of competition (SLC) in the supply of metal packaging coatings in the UK.
AkzoNobel has an existing stake of 49 per cent in Metlac Holding through its subsidiary Akzo Nobel Coatings International B.V. (ANCI). The remaining 51 per cent is owned by members of the Bocchio family. Metlac Holding owns 55.56 per cent of Metlac S.p.A. (Metlac), the operating company. AkzoNobel also owns the remaining 44.44 per cent of Metlac. Notwithstanding these shareholdings, AkzoNobel does not currently have sole control of Metlac.
ANCI has a call option to buy the remaining shares in Metlac Holding, which it has decided to exercise. The merger would see AkzoNobel assume sole control of the company.
AkzoNobel and Metlac both manufacture and supply metal packaging coatings. These are used, for example, in the production of beverage and food cans. The merging parties are two of the four main suppliers of metal packaging coatings in the European Economic Area (EEA) and between them supply between 40 and 55 per cent of metal packaging coatings for beer and beverage metal packaging in the EEA and between 35 and 50 per cent of metal packaging coatings for food, caps and closures and general line metal packaging in the EEA.
The CC received a number of third party concerns relating to the loss of Metlac as a competitor. Evidence considered by the CC shows that Metlac is considered by customers to be especially price-competitive and that it represents a significant competitive constraint to AkzoNobel.
Roger Witcomb, CC Chairman and Chairman of the AkzoNobel/Metlac inquiry, said: “Metlac competes strongly with Akzo Nobel, the leading player, in these markets. A number of customers indicated that Metlac is a significant competitive force due to its low pricing, strong product quality and innovation and that its removal would eliminate a significant competitive constraint to Akzo Nobel and could therefore result in price increases.”
The CC has also published a Notice of Possible Remedies to remedy the harm to competition, which includes a remedy preventing AkzoNobel from exercising its call option. The full provisional findings report will be published shortly.