The European Commission has approved the acquisition by Umicore, the Belgian precious metals and advanced materials group, of the precious metals division of OMG, a company based in Cleveland. While the acquisition will make Umicore a strong player in the precious metals recycling business, the EC determined that the company will face sufficient competition.
Umicore, based in Belgium, is active in the supply of copper and zinc, the production of added value products based on precious metals, and the provision of recycling services for the recovery of precious metals from various industrial by-products and recyclable materials.
The OM Group is involved in production and marketing of value-added, metal based specialty chemicals and powders. The company operates two business units -- the Base Metal Group and the Precious Metal Group. Only the latter is subject to this transaction.
PMG is mainly active as a manufacturer of automotive catalysts, where it is one of the largest supplier world-wide, and other precious metals based products. It also provides recycling services for the recovery of precious metals from automotive catalysts.
The EC investigation focused first on the transaction's likely impact in the market for the provision of automotive catalysts recycling services, where the two companies' activities overlap.
The Commission concluded that although the merged entity will become the number one supplier of such services in Europe, it will face sufficient competitive pressure from the other main suppliers located in and outside Europe. In this respect, the Commission noted that that customers of automotive catalysts recycling services in Europe have real possibilities to have their spent catalysts recycled abroad, so that competitors with facilities in America or Africa exert a significant competitive constraint on suppliers based in Europe.
The Commission also examined whether the acquisition was likely to lead to anti-competitive effects in the automotive catalysts market as a result of the merged entity's position in the upstream market for the supply of precious metals and in the downstream market for the provision of recycling services. It should be noted that Umicore does not produce catalysts. The Commission noted that the merged entity will remain a net buyer of precious metals, and therefore concluded that it will not be in a position to deny competitors access to precious metal supplies. Finally, the Commission concluded that the merged entity's new position in the automotive recycling business would not confer on it a significant competitive advantage, since the main manufacturers of automotive catalysts are also providers of such services.