Monday, March 4, 2013

EU stops merger of Tencel and Lenzing Lyocell - Part 8 (2001)

The EU Commission concluded that The notified operation will create a worldwide near monopoly on the lyocell production and processing technology market and thus eliminate or severely restrict any remaining competition in that sector, enabling the parties to act independently of potential competitors and of their customers.

On 25 September 2001, CVC proposed the following hoping to remove these competition concerns:-

258. A non-exclusive licence under Lenzing and Acordis lyocell patents is to be given to an independent third party licensee approved by the Commission. This licensing will not include the right to sub-license. It will include the provision of any necessary technical assistance and support (including production and processing technology). The geographical scope for the licence is to encompass at least the whole of the EEA area.

259. The remedy proposals also provide for sub-contract manufacturing arrangements for a period of up to five years, up to in aggregate [redacted] tonnes per annum of lyocell, giving the third party licensee access to the merged group's production infrastructure.

The Commission was not impressed and finally concluded that the proposed undertakings do not remove the competition concerns identified in its Statement of Objections and cannot form the basis for an authorisation decision.

While we've ignored the paragraphs related to the merger of the viscose operations of Acordis and Lenzing, the lyocell conclusions are separate and convincing.  If the Commission had been considering just the merger of Tencel and Lenzing Lyocell, there is no reason to suppose the conclusion would have been any different.

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