European Commission Approves Merger of AGROFERT and Borealis NITRO

  • 15-Mar-2023
  • Journalist: Jaideep

Prague [Czechia]: The acquisition of the Nitrogen business of Borealis AG (‘Borealis NITRO') by AGROFERT Group ('AGROFERT') has been approved without condition by the European Commission under the EU Merger Regulation. The Commission found that there would be no competition concerns in the European Economic Area (‘EEA') as a result of the transaction.

Both Borealis AG and AGROFERT are active in agricultural and chemical sectors, operating in the production and sale of Nitrogen fertilizers, AdBlue liquid, and other technical Nitrogen products.

Following a market investigation, the European Commission concluded that the proposed transaction would have no significant impact on competition in markets for Nitrogen fertilizers, AdBlue exhaust fluid and technical Nitrogen products such as aqueous Ammonia and weak Nitric acid. Additionally, it found no competition concerns regarding the distribution of Nitrogen fertilizers in Czechia and Slovakia.

The European Commission recently revealed that the Nitrogen fertilizer market and the production and sale of Calcium Ammonium Nitrate fertilizers overlaps horizontally. The Commission found that customers source these products from all over the EEA, suggesting a wider scope than just Member States. Additionally, various types of Nitrogen fertilizers are typically deemed to be substitutable. Despite the merger, competition will remain strong as several powerful competitors continue to operate in the same space, combined market share would also remain moderate. The merged entity would also have to compete with imports from other regions outside of the EEA.

Following a transaction between Borealis NITRO, a supplier of Nitrogen fertilizers, and AGROFERT, a retailer of these products in Czechia and Slovakia, the European Commission found that numerous suppliers of Nitrogen fertilizers would remain active in the EEA. The parties are not significantly large customers of third-party fertilizers and there will be enough competing distributors to continue to operate in Czechia and Slovakia.

The Commission has recently concluded that the horizontal overlap between the activities of two companies in the market for AdBlue and technical Nitrogen products will not raise any competition concerns in the European Economic Area. This follows from their investigation, which showed that there are several competitors present in each of these markets and that the merged entity would still face strong competition. Consequently, the transaction has been cleared unconditionally.

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