The European Commission has approved unconditionally, under the EU Merger Regulation, the proposed acquisition of Alumetal by Norsk Hydro.
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The Commission concluded that the merger would not raise competition concerns in the European Economic Area (‘EEA'), notably for green aluminium foundry alloys.
The decision follows an in-depth investigation of the proposed acquisition of Alumetal by Norsk Hydro.
Both companies are major European producers of aluminium foundry alloys, a semi-finished aluminium product used mainly by the automotive industry to cast auto parts.
Alumetal makes these from recycled material, while Norsk Hydro uses non-recycled material and relies on renewable energy for its production. Alumetal also produces aluminium master alloys used to produce casthouse products such as aluminium foundry alloys.
In the context of its in-depth investigation, the Commission assessed whether the transaction might: reinforce Norsk Hydro's leading position as a supplier of aluminium foundry alloys; (eliminate important competition from a growing supplier able to bring cheaper and advanced recycled aluminium products to the market and in particular to automotive customers; and result in few or no credible alternative master alloy suppliers, following the combination of Alumetal's production of master alloys upstream and Hydro's production of casthouse products downstream.
The Commission found that:
• The parties' combined market shares in the EEA market for solid advanced aluminium foundry alloys are moderate and there are a number of sizeable alternative suppliers, including green players. Moreover, the parties are not close competitors in the market for solid advanced aluminium foundry alloys.
• The vertical relationships between Alumetal as a producer of aluminium master alloys and Hydro as a potential customer would not raise concerns because of the presence of sufficient alternative suppliers and customers of this product on the market.
The Commission therefore concluded that the transaction would raise no competition concerns in the EEA or any substantial part of it and cleared the case unconditionally.
Norsk Hydro is a Norwegian aluminium company with activities throughout the aluminium value chain, ranging from bauxite and alumina production to energy generation and aluminium recycling.
Alumetal is a Polish producer of aluminium foundry alloys and aluminium master alloys with plants located in Poland and Hungary. ■