EC/FTC argue against merger of Tencel and Lenzing Lyocell (2001)
This extract from an EC press release dated 17/10/2001 just surfaced. It summarises the other series of posts on this issue in the 2001 folder. Promises to licence the process, and to toll-manufacture for a licencee were inadequate commitments (made by CVC) to allow the merger. (Memo to self: what changed to allow the deal when Lenzing proposed it?) The market for lyocell technology was worldwide. As regards lyocell production, the Commission took the view that it was not necessary to define the geographical market since Lenzing and Acordis are the only producers worldwide...
...and the only two players in the market for lyocell production and processing technology currently able to offer "ready-to-operate" technology. Together, the parties hold the vast majority of all existing patents for lyocell production and treatment, and market entry in this market is difficult. The Commission therefore concluded that the concentration would create a dominant position in the both lyocell production and technology markets.
During the second phase of the review the parties submitted the following commitments: (i) a non-exclusive licence with regard to lyocell; (ii) a toll-manufacturing arrangement whereby the parties would produce lyocell for the licensee; (iii) a non-exclusive licence with regard to Galaxy tampon fibre. The Commission took the view that these commitments were not adequate to eliminate the concerns raised by the concentration.
The FTC, which is the competent US antitrust authority in this case, and the Commission have remained in close and mutually beneficial contact all along the procedure by sharing information, and by discussing and developing consistent analysis of the main substantive issues. This case therefore constitutes an example of co-operation and mutual understanding between US and EU competition authorities. Source: EU Press release