Kroes stelt voorwaarden aan Australisch-Noorse fusie tussen producenten van explosieven en detonatoren (en)

The European Commission has approved, under the EU Merger Regulation, the proposed acquisition by Australia-based Orica Ltd. ("Orica") of most of the businesses of Norwegian company Dyno Nobel ASA ("Dyno") outside North America and Australia. Both companies are active in the explosives and detonators industry.

The Commission, which had been requested by the national competition authorities of Sweden, Germany and Norway to look at this transaction, gave its go ahead subject to Orica's commitment to divest its explosives business in Norway and Sweden, where the merging parties are by far the largest suppliers. In light of this commitment, the Commission has concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or a significant part of it.

Competition Commissioner Neelie Kroes i commented: "Since the parties were prepared to offer a clear-cut remedy entirely removing the overlap between their explosives activities in Norway and Sweden, we are now satisfied that the creation of the new entity would not result in higher prices for explosives and detonators to the detriment of the mining and construction industry and ultimately of consumers".

Orica is a publicly listed Australian company active in mining services, chemicals, consumer products and fertilisers. Dyno manufactures and sells commercial explosives and initiating systems (detonators). Under the proposed operation, Orica would acquire almost all of Dyno's business in Europe, Africa, Asia and Latin America; the Dyno operations in the USA, Canada, Australia and New Zealand have been spun-off as a separate company which has been sold to the stock market by an initial public offering.

The parties' activities overlap in the markets for commercial explosives in Norway and Sweden as well as in the European-wide market for initiating systems. Explosives and detonators are used in the mining, quarrying and construction industries.

In explosives in Norway and Sweden, Dyno is by far the largest supplier, followed by Orica. Thus, the proposed transaction would give the merged entity a clear dominant position. However, Orica committed to divest its subsidiary Orica Scandinavia Mining Services, which comprises its entire explosives business in those two countries. This divestiture would restore the competitive situation before the merger and, hence, entirely remove the competition concerns that could have been created by the merger.

The operation would give the merged entity a leading position in the European wholesale initiating systems market. However, the Commission's investigation showed that the merged entity will face competition from a number of strong competitors, each of which supplies both the more traditional electric detonators and the technologically more advanced non-electric detonators. These competitors possess considerable excess capacity, which would enable them to increase their sales should the merged entity be tempted to reduce output with a view to raising prices. The Commission was therefore able to conclude that the proposed transaction would not significantly impede effective competition in the wholesale initiating systems market in Europe.