Conditional approval for Hanwha’s acquisition of Samsung General Chemicals

10-Mar-15

South Korea's Fair Trade Commission (KFTC) has given conditional approval to Hanwha's proposed acquisition of Samsung General Chemicals, as per chemicals-technology.com. Markets of low-density polyethylene, linear low-density polyethylene and high-density polyethylene will not be significantly affected by the transaction. However, the regulatory authority identified that the combined entity could dominate the domestic ethylene vinyl acetate (EVA) market- the deal will strengthen the monopolistic nature of the EVA market as the market share of Hanwha Chemical and Samsung Total will be higher and the number of competitors will decrease from four to three. The approval requires the company to ensure that the domestic price of EVA is increased at slower rate in domestic market in next three years if export price of EVA rises in overseas market. It should be lower than the rate of export price increase of the production in the past six months. Hanwha should also see that in case of EVA export price decreases, domestic price should be lowered by the rate of decrease higher than the rate of export price decrease of the past six months period. The remedies imposed should be implemented for the next three years and the report on proceedings should be submitted to the agency semi-annually, KFTC said.