Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: EC approves acquisition of Nyrstar by Trafigura, (Dec 16, 2015)
Organizations Mentioned:Nyrstar N.V. | Trafigura Beheer B.V.
By Michael Menzhuber, J.D., LL.M.
The acquisition of sole control of zinc supplier Nyrstar of Belgium by independent commodity trader Trafigura of the Netherlands has been approved by the European Commission (EC) under the European Union (EU) Merger Regulation. In approving the acquisition, the EC concluded that it would not raise competition concerns in the European Economic Area (EEA) market for zinc metal because the companies are not close competitors and alternative suppliers would remain active after the merger, the agency announced today.
Trafigura is one of the world’s leading independent commodity traders, specializing in oil, minerals and metals markets. Nyrstar is an integrated mining and metals business, with established positions in zinc and lead.
Nystar currently supplies zinc metal to Noble, a competitor to Trafigura, on the basis of an existing long-term contract. An EC investigation into the potential consequences, should the supply relationship with Noble be terminated after the merger, showed that there would not be any adverse effects for competition in the market for zinc metal in the EEA.
After examining the vertical relationship arising from Trafigura's supply of zinc concentrate that can be used as an input for Nyrstar's production of zinc metal, the EC concluded that: (1) the merged entity would be unable to hinder competing zinc metal producers from access to zinc concentrate; and (2) suppliers competing with Trafigura would still have a sufficient customer base as several other purchasers would remain active in the market.
Trafigura has been building up its stake in Nyrstar over time until reaching a level of around 20 percent that, on the basis of historical attendance rates of Nyrstar's shareholders' meetings, leads to control over a stable majority of votes. The transaction was, therefore, deemed to be notifiable under EU merger rules.
Companies: Nyrstar N.V.; Trafigura Beheer B.V.
News: AcquisitionsMergers Antitrust