European Commission clears acquisition of joint control over certain assets of Ineos by PetroChina

16-May-11

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of joint control over certain assets currently wholly owned by Ineos AG of Switzerland by PetroChina Company Limited of China and Ineos AG. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. PetroChina is a Chinese company active in the production and distribution of petroleum and petrochemical products. It is controlled by China National Petroleum Corporation ("CNCP group"). CNPC group is a Chinese State-owned company which is engaged in a broad range of petroleum and gas related activities including (i) the exploration, development, production and sale of crude oil and natural gas, (ii) the refining, transportation, storage and marketing of crude oil and petroleum products and (iii) the production and sale of basic petrochemical products, derivative chemical products and other chemical products. Its activities are mainly based in China. Ineos manufactures petrochemicals, specialty chemicals and oil products at global level. The target assets consist of Ineos' refining business, namely two refineries in Grangemouth (Scotland) and Lavera (France) and associated assets. The Commission’s examination of the proposed transaction showed that the horizontal overlaps and the vertical relationships between the parties' activities were limited and that the transaction would not change the competitive structure of the markets for oil products under any alternative product and geographic market definition. This assessment would have remained unchanged also taking into account the market shares of the other Chinese State-owned companies active in the oil sector. Therefore, the Commission did not conclude on whether CNCP group should be qualified as a State-owned company within the meaning of the Merger Regulation and therefore whether all the other Chinese State owned undertakings active on the same sector should be considered as belonging to one economic entity. The Commission therefore concluded that the proposed acquisition would not raise competition concerns.