Mergers: Commission approves acquisition of Houghton by Quaker, subject to conditions

The European Commission has approved, under the EU Merger Regulation, the acquisition of Houghton by Quaker, both producers of industrial lubricants. In particular, both companies are active in the supply of rolling oils, which are particular types of metal working fluids used in the production of metals, such as aluminium and steel. The Commission was concerned that the takeover, as originally notified, would lead to a loss of competition in the markets for the supply of certain rolling oils in the European Economic Area (EEA).

In particular, the Commission's market investigation found that the EEA markets for the supply of (i) Aluminium Hot Rolling Oils (“AHRO”), (ii) Steel Hot Rolling Oils (“SHRO”), and (iii) Steel Cold Rolling Oils (“SCRO”) are highly concentrated, and that Quaker and Houghton closely compete on these markets. In light of these elements, the Commission considered that the proposed acquisition would have likely led to higher prices and reduced quality of the products and services provided to customers. To address the Commission's competition concerns, Quaker offered to divest Houghton's EEA businesses for AHRO, SHRO and SCRO, to Total SA, of France, on a global basis.

The Commission will still assess whether Total has the ability and incentives to be an active competitor of the merged entity on a lasting basis. These commitments eliminate the Commission's concerns in relation to the proposed acquisition. Therefore, the Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.

The full press release is available online in EN, FR, DE.