In February this year, the two firms reached an agreement that would see Univar acquire all shares of Eurochem, also known as Quaron.
The deal has since been examined by the European Commission, which this week approved the acquisition of Eurochem’s Belgian and Dutch activities under the EU Merger Regulation. However, the acquisition of the firm’s French activities has been referred to the French competition authority.
Univar and Eurochem, which is the holding company of Quaron, both distribute commodities and specialty chemicals to industries including food, feed, pharmaceuticals and cosmetics.
Quaron told FoodNavigator.com that it distributes ingredients from suppliers both in Europe and outside Europe. Some of its widest selling food ingredients include: salt, citric acid, sodium bicarbonate, phosphates, ascorbic acid, sodium citrate, lactic acid and acetic acid.
Eurochem’s three areas of activity are Belgium, the Netherlands and France. In a statement issued earlier this week, the EC said its investigation found no competition concerns in the overlaps of Univar and Eurochem in Belgium and the Netherlands because “other players will put sufficient constraints on the merged entity”.
Competition concerns in France
However, the EC’s preliminary investigation into Eurochem’s French activities found that the proposed acquisition would “threaten to significantly affect competition in the distribution of chemicals in France”.
“For commodities, a majority of stakeholders raised concerns that the transaction could negatively affect competition in particular in Western France. It would lead to a reduction of national players from three to two and would remove a significant competitive constraint on Univar and its main competitor Brenntag. At a national level, the merger would increase the symmetry between Brenntag and the merged entity, which could be an indication that coordinated effects might result from the merger,” stated the Commission.
The EC has now referred the case to the French competition authority. More information on this case will become available here.