Commission clears two-to-one merger on failing division defence

On 2 September the European Commission cleared without conditions Nynas’ acquisition of Shell’s Harburg refinery assets after a Phase II investigation. The decision represents the first clearance on failing division grounds in the history of the EU Merger Regulation.Nynas is a manufacturer of base oils, an intermediate product used in a range of industrial products, including greases, inks and transformer oils. Nynas’ manufacturing plant in Sweden and the Shell Harburg refinery are the only two plants in Europe able to produce naphthenic base oils. The Commission’s market investigation found that the European production of naphthenic base oil constituted a relevant market, and so that the transaction represented a two-to-one merger.Shell demonstrated that in the absence of the transaction the Harburg refinery assets would leave the market, and that there was no prospect of an alternative acquisition. As such, the Commission cleared the Nynas acquisition on the grounds that it was less anti-competitive than the counterfactual.RBB, working with Clifford Chance in Paris, advised Shell during the sale process and throughout the European Commission merger investigation. Click here to view the press release.