Advent’s acquisition of Maxam cleared despite vertical links

The European Commission has cleared the proposed acquisition of joint control of Maxam by Advent and 110 individuals. The individuals include Maxam’s current managers, technical experts, other employees, and co-investors. The U.S.-based Advent is a global financial services company; Maxam is a Spanish company that manufactures explosives, ammuniation, and chemical products. 

The acquisition creates vertical links in two areas that the Commission nonetheless found not to raise serious competition concerns:

1) The acquisition creates a vertical link between Advent’s production of the oxo-alcohol 2-ethylhexanol (2-EH) and Maxam’s downstream production of 2-ethyhexyl nitrate (2-EHN), a cetane number improver for diesel fuel. However, there are “alternative suppliers with sufficient production capacity, the increasing trend of imports, a sufficient degree of buyer power from 2-EHN customers and a lack of incentives for the merged entity to engage in an input foreclosure strategy.”

2) There is also a vertical relationship created in the market for tungsten metal powder, boron amorphous, and butyl acetate. The Commission found that the two companies’ market shares and strong competition posed no risk of foreclosure. 

Source: EC Press Release

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