Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,  BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGE R-REGISTRY@ec.europa.eu . 
 EUROPEAN COMMISSION  
 
 
 
 
 
Brussels, 11.10.2018  
C(2018) 6796 final  
  
 
 
To the notifying party 
 
 
Subject : Case M. 9017  – SK Capital Partners / Schenectady International 
Group   
 
Commission decision pursuant to Article 6(1)(b) of Council 
Regulation No  139/20041 and Article 57 of the Agreement on the 
European Economic Area2 
 
Dear Sir or Madam,  
 
(1) On 6 September 201 8, the European Commission ("the Commission") received 
notification of a proposed concentration pursuant to Article 4 of the Merger 
Regulation by which SK Capital Partners, LP ("SK Capital", USA) intends to 
acquire, through its portfolio company Addivant USA Holdings Corp. 
("Addivant", USA), sole control over Schenectady International Group, Inc. ("SI 
Group", USA) within the meaning of Article 3(1)(b) of the Merger Regulation, by 
way of purchase of  shares  (the "Transaction") .3 SK Capital is referred to as the 
"Notifying Party". SK Capital and SI Group are collectively referred to as the 
"Parties" , whilst the undertaking resulting from the Transaction is referred to as 
"the merged entity".   
  
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation'). With effect from 1 December 2009,  the Treaty on the Functioning of the 
European Union ('TFEU') has introduced certain changes, such as the replacement of 'Community' by 'Union' and 'common 
market' by 'internal market'. The terminology of the TFEU will be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').  
3  Publication in the Official Journal of the European Union No C 325, 14.9.2018, p. 14.  In the published version of this decision, some 
information has been omitted pursuant to Article 
17(2) of Council Regulation (EC) No 139/2004  
concerning non -disclosure of business secrets and 
other confidential information. The omissions are 
shown thus […]. Where possible the information 
omitted has been replaced by ranges of figures or a 
general description.  PUBLI C VERSION  
 
 
 
2 1. THE PARTIES   
 
(2) SK Capital  is a US -based private investment firm, focused on the specialty 
materials, chemicals  and pharmaceuticals sectors.  
 
(3) Addivant  is SK Capital's portfolio company and is  a global producer and supplier 
of specialty additives including antiox idants and intermediates used to improve 
the production and performance properties of plastics and rubbers.   
 
(4) SI Group , incorporated in the USA,  is a privately owned manufacturer and 
supplier of performance additives and chemical intermediates, active glob ally.  
 
2. THE OPERATION  
 
(5) The Parties entered into a Merger Agreement on 31 May 2018. For the purpose of 
the Transaction, SK Capital w ould acquire, indirectly through Addivant, sole 
control of SI Group  by acquiring all of its shares. At clos ing of the operati on, SK 
Capital plans to combine its portfolio company Addivant and SI Group.   
 
(6) The Transaction therefore constitutes a concentration pursuant to Article 3(1)(b) 
of the Merger Regulation . 
 
3. UNION  DIMENSION  
 
(7) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 2 500 million4 (SK Capital: EUR […] million, SI Group: EUR 
[…] million). The aggregate U nion-wide turnover exceeds EUR 100 million  in 
[three Member States] . The turno ver of both undertakings exceeds 25 million in 
each of these countries , and neither  SK Capital, nor SI Group generates more than 
two thirds of their U nion-wide turnover within one and the same Member State.  
 
(8) The Transaction  therefore has a U nion dimension  pursuant to Article 1(3) of the 
Merger Regulation . 
 
4. COMPETITIVE ASSESSMENT  
 
(9) SK Capital and SI Group have largely complementary portfolios with limited  
overlaps. More s pecifically, the Transaction leads to horizontal overlaps  
between the activities of Addi vant and SI Group in relation to the supply of 
antioxidants. Under the retained product market definitions (see below), t hose 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
 
 
 
3 overlaps give rise to affected markets only in relation to very specifi c types 
(grades) of antioxidant s. 
 
(10) In addition, the Transaction leads to a number of vertically affected markets  in 
light of the activities of SK Capital (through its portfolio companies TPC Group 
and Addivant) and SI Group . These vertical links  relate to various  specialty 
chemicals that one Party produces a nd the other uses as input in the production of 
a variety of other chemicals . Specifically,  
 
a. SI Group produces 2,4 di -tert-butylphenol (" 2,4 DTBP ") and 2,6 di -tert-
butylphenol (" 2,6 DTBP "), input chemicals used by Addivant (and SI 
Group) to produce certai n antioxidant s; 
 
b. SI Group produces  6-tert-Butyl -o-Cresol  ("6-BOC "), while Addivant  uses 
6-BOC to produce certain  antioxidant s; 
 
c. SI Group produces o-sec-Butylphenol  ("OSBP "), an input chemical used 
by Addivant to produce 2,4-dinitro -6-sec butyl phenol  ("DNPB "); 
 
d. SK Capital's portfolio company TPC Group produces Diisobutylene 
("DIB"), a raw material input used by SI Group to produce  4-tert-
Octylphenol (" PTO P"); 
 
e. SK Capital's portfolio company TPC Group produces High Purity 
Isobutylene (" HPIB "), a raw mater ial input used by Addivant  for the 
production several  chemical intermediates  (i.e. 4-tert-ButylyPhenol 
("PTBP "), 2,4 DTBP , 2,6 DTBP , phenolic resins and 6-BOC ); 
 
f. SK Capital's portfolio company TPC Group supplies Butene -1, a raw 
material input used by SI Gr oup in the production of two chemical 
intermediates, namely OSBP and Di-sec-Butylphenol (" DSBP "). 
 
A. Horizontal overlaps  
 
4.1. Antioxidants  
 
4.1.1.  Relevant product market s 
 
(11) Antioxidants are chemical additives used primarily in plastic resins that protect 
polymers from oxygen degradation.  
 
(12) In its previous decisional practice, the Commission concluded that a distinction 
could be made  between (i) primary antioxidants, which protect polymers during 
the production and processing stages, and (ii) secondary antioxidants, which  are 
 
 
 
4 used to protect polymers once they are manufactured .5 The Commission also 
further segmented  primary and secondary antioxidants on the basis of their main 
compound into , on the one hand,  (i) amines , and (ii) phenolics (for primary 
antioxidants ); and, on the other hand, into  (i) organophosphites ("OPHs") , and (ii) 
thioesters (for secondary antioxidants ).6  
 
(13) In relation to  phenolics, th e Commission left open the  question  of whether the 
market  concerned should be segmented even further at the level of anti oxidant 
grades .  
 
(14) In relation to OPHs, the Commission further distinguished between products sold 
in solid and liquid form . As regards solid OPHs, it found supply -side 
substitutability between different grades, thus defining the relevant product 
market at the level of solid OPHs .7  
 
(15) As shown in the Table below, t he Parties' activities overlap only on the markets 
for phenolics and solid OPHs .  
 
Table 1. Overview of the Parties' activities in the markets for antioxidants  
Class  Category  Grade8 Addivant  SI Group  
Primary 
antioxidants   
 
Phenolics  
 1076  ✓ through resale only  ✓ through resale only  
1010  ✓ ✓ 
1330  ✓ through resale only  ✓ 
3114  ✓ ✓ through resale only  
245 ✓  
1098  ✓  
1315  ✓  
Other    
Amines  ✓  
Secondary 
antioxidants  OPHs  Solid  ✓ ✓ 
Liquid  ✓  
Thioesters  ✓  
 
(16) The Notifying Party  did not contest the Commission's precedents and submits that 
the market  for phenolics should not be segmented based on grade in light of 
demand -side and supply -side substitutability considerations.  
 
                                                 
5  Cases COMP/M.3805 - Crompton/Great Lakes , decision of 15 June 2005, COMP/M.5355 - BASF/CIBA , decision of 12 March 
2009 and COMP/M.8261 – Lanxess / Chemtura , decision of 31 Mar ch 2017.  
6  Ibid. 
7  Case COMP/M.3805 - Crompton/Great Lake s, decision of 15 June 2005.  
8  In line with industry practice, the grades of antioxidants are referred to by the designation given by BASF, which is one of the 
main produce rs of antioxidants.  
 
 
 
5 (17) The market investigation in the present case indicated that it would not be 
appropriate to depart from Commission's precedents ; therefore solid OPHs and 
phenolics are distinct product markets.  
 
(18) In relation to the potential segmentation of  the pheno lic antioxidant market based 
on grade s, the market investigation provided mixed results as to the degree of 
demand -side substituta bility between different grades. As regards the supply -side 
substitutability , although a few  competitors explained that they produ ce different  
phenolic  grades using dedicated equipment, the market investigation provided 
indications that it is possible to produce various grades on the same production 
line and thus to switch easily between the different phenolic products. For 
example, one competitor stated that "phenolics can be [produced] one the same 
dedicated line" ,9 while another actually explained that it does produce  BASF 
3114 in the same production line than BASF 245.10  
 
(19) In light of the results of the market investigation and tak ing account of all 
evidence available to it, the Commission considers that, for the purpose of this 
Decision , (i) solid OPH  antioxidants constitute a relevant product market; and (ii)  
the question of whether the market for phenolic antioxidants should be segmented 
on the basis of grades can be left open, since the T ransaction does not raise 
serious doubts as to its compatibility with the internal market, regardless of the 
exact product market definition .  
 
4.1.2.  Relevant g eographic market s 
 
(20) In its previous  decisional practice ,11 the Commission found that the relevant 
geographic market for antioxidants (and its sub -segments) is at least EEA -wide in 
scope.  
 
(21) The Notifying Party claims that the geographic marke t is likel y to be global but 
that, in any event, it can be left open in this case s ince the Transaction does not 
give rise to any competition concerns at both EEA and global level .  
 
(22) The results of the market investigation point ed to various elements that could 
indicate a wider than EEA scope of  the markets concerned. The majority of 
antioxidants producers explained  that while there are certain  barriers to trade  (e.g. 
import duties, REACH registration), these do not prevent them from selling their 
products globally.12 There are no technical characteristics that impede 
antioxidants to travel long distances and suppliers do serve customers located 
                                                 
9  Replies to question 6 of Q1 – questionnaire to producers of antioxidants.  
10  Replies to question 7 of Q1 – questionnaire to producers of antioxidants.  
11  Cases COMP/M.3805 - Crompton/Great Lakes , decision of 15 June 2005 and COMP/M.5355 - BASF/CIBA , decisi on of 12 
March 2009.  
12  Replies to question 12 of Q1 – questionnaire to producers of antioxidants.  
 
 
 
6 outside the regions where they produce antioxidants .13 Customers explained that 
while proximity of suppliers may be an advanta ge, it is not a requirement and, in 
light of the relatively low transportation costs of the products concerned, it is not 
a crucial characteristic.14 In addition, according to the market investigation, 
should  the price of antioxidants in the EEA  be subject to a small but permanent 
increase in price, in the order of 5 -10%, customers would be promptly purchasing 
the products concerned from suppliers located outside the EEA.15  
 
(23) In conclusion , the Commission considers that, for the purpose of th is Decision , 
the precise geographic market definition for the market s of (i) solid OPHs , and 
(ii) phenolics  (and its potential sub -segments  based on phenolic grades ) can be 
left open , since th e Transaction does not raise serious doubts as to its 
compatibility  with the inte rnal market, regardless of any plausible geographic 
market definition.  
 
4.1.3.  Competitive assessment  
 
(24) Under Article 2(2) and (3) of  the Merger Regulation, the Commission must assess 
whether a proposed concentration would significantly impede effective 
competition in the internal market or in a substantial part of it, in particular 
through the creation or strengthening of a dominant po sition.  
 
(25) A merger can entail horizontal effects. In this respect, the Commission Guidelines 
on the assessment of horizontal mergers under the Merger Regulation (”the 
Horizontal Merger Guidelines”)16 distinguish between two main ways in which 
mergers between  actual or potential competitors on the same rel4evant market 
may significantly impede competition, namely non -coordinated and coordinated 
effects. Non -coordinated effects may significantly impede competition, 
eliminating important competitive constraints on one or more firms, which 
consequently would have increased market power, without resorting to 
coordinated behaviour.  
 
(26) This Decision will analyse whether the Transaction is likely to raise serious 
doubts as to its compatibility with the internal market b y the creation of non -
coordinated effects in those markets on which the Parties’ activities lead to 
horizontal overlaps.  
 
(27) The Parties' activities overlap at the level of phenolics and solid OPHs. However, 
affected markets would arise only at a more granular level , in relation to specific 
                                                 
13  Replies to question 11 of Q1 – questionnaire to producers of antioxidants.  
14  Replies to question 15 of Q3 – questionnaire to customers of antioxidants.   
15  Replies to question 12 of Q3 – questionnaire to customers of antioxidants.  
16  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between 
undertakings, OJ C 31, 5.2.2004 p.5  
 
 
 
7 grades of phenolic antioxidants, that is to say: BASF 1330 ( 1,3,5 -Trimethyl -2,4,6 -
tris(3,5 -di-tert-butyl -4-hydroxybenzyl)be nzene ) and BASF 3114 (1,3,5 -Tris(3,5 -
di-tert-butyl -4-hydroxybenzyl)isocyanurate).  In relation to both grades, only one 
of the Parties produces the products concerned while the other is active on the 
market through resale. While the Parties' activities also  overlap in relation to the 
supply of BASF 1076 and BASF 1010, these would not lead to affected markets.  
 
(28) As shown in the table below, t he Parties' combined market shares on the relevant 
market for solid OPHs are [5-10]% and [10-20]% in the EEA and globall y, 
respectively. Their combined market shares on the relevant market for phenolics 
are [5-10]% and [10-20]%, in the EEA and globally, respectively.   
 
Table  2: The Parties' and their competitors' market shares (in volume, MT) on the markets for (i) Solid 
OPHs and (ii) Phenolics in 2017, in the EEA and globally17 
 Solid OPHs  Phenolics  
 EEA  Global  EEA  Global  
SI Group  [0-5]% [5-10]%  [0-5]% [0-5]% 
Addivant  [0-5]% [10-20]%  [5-10]%  [5-10]%  
COMBINED  [5-10]%  [10-20]% [5-10]%  [10-20]%  
BASF  [30-40]%  [20-30]%  [30-40]%  [20-30]%  
Songwon  [20-30] %  [20-30]%  [10-20]%  [10-20]%  
Adeka  [5-10]%  [10-20]%  [5-10]%  [5-10]%  
Everspring  [0-5]% [0-5]% [5-10]%  [5-10]%  
Rich Yu  [5-10]%  [5-10]%  [0-5]% [0-5]% 
Others  [20-30]%  [20-30]%  [30-40]%  [30-40]%  
Total  100%  100%  100%  100%  
Source: Form CO 
 
(29) Based on the relevant product market definitions discussed in Section 4.1.1, the 
combined market  shares of the Parties would exceed 20% only if the market for 
phenolics were to be narrowly segmented, at the level of grades. In this respect, 
two potential affected markets would arise: BASF  1330 and BASF 3114 . 
 
(30) BASF  1330  is a niche market that accounts for only 1% of the total demand for 
phenolic antioxidants .18 On this potential segment, the Parties' combined market 
shares would amount to [40-50]% both at EEA and global level, however with a 
small increment brought about by the T ransaction ( [0-5]% in the EEA and [0-5]% 
globally). According to the Parties' estimate s, other competitors  prese nt on the 
market include BASF (with a market share of about [10-20]%, both in the EEA 
and globally) and Songwon ( [10-20]% in the EEA and [10-20]% globally), 
together with other suppliers, mostly located in Asia, some of which do also have  
                                                 
17  The Notifying Party submits that the market shares of the Parties did not substantially differ in the past three years. Marke t 
shares in value would not substantially differ from market shares in volume.  
18  The Notifying Party  estimate s the total global a nd EEA market size fo r BASF 1330 in 2017 to  be […] MT ( USD […]) and […] 
MT ( USD […]), respectively . 
 
 
 
8 activities in the  EEA. The limited  market share of Addivant is explained by the 
fact that the company does not produce this product internally but sources it from 
[…] on a spot basis […].  
 
(31) BASF  3114  is also a niche market that accounts for only 1% of the total demand 
for phenolic antioxidants.19 On this potential segment, the Parties' combined 
market shares would amount to [30-40]% globally ( [20-30]% Addivant and [10-
20]% SI Group ) and [30-40]%  in the  EEA ( [10-20]%  Addivant an d [10-20]%  SI 
Group ). According to the Parties' estimate s, other suppliers present on the market 
include BASF (with a market share of about [30-40]%  in the EEA and [20-30]%  
globally) and Songwon ( [20-30]%  in the EEA and [10-20]%  globally) . In 
addition, other suppliers, mostly located in Asia, do also have activities in the 
EEA. SI Group  sourc es its needs for this specific grade of antioxidant from a third 
party  on a non -exclusive basis.  
 
(32) The majority of market participants responding to  the market investigation 
identified only one of the Parties among  the top three suppliers for BASF 1330  
and BASF 3114, either in the EEA or globally.20 Overall, it appears that each o f 
the Parties  compete more closely with other suppliers, in particular BASF and 
Songwon , rather than between themselves , both in relation to the specific grades 
considered and in relation to phenolic antioxidants overall.21  
 
(33) The market investigation also revealed that besides BASF, Songwon and the 
Parties, there ar e alternative suppliers on the market who produce  either one of 
BASF 1330 and BASF 3114 , or both . These include in particular Everspring  
(Taiwan), Rianlon  (China), and Jiyi Chemical (China), as well as other resellers 
such as Adeka  and Mitsubishi.  
 
(34) In addition, the vast  majority of customers indicated that switching supplier  for 
phenolics  is relatively  easy, especially in light of the fact that they have typically 
qualified already all  the main antioxidants suppliers active on the market. The 
market inv estigation did not provide  indications that this would differ depending 
on the specific grades considered.22  
 
(35) While some  customers  have generically  mentioned that the Transaction  will 
remove one supplier of antioxidants from the market, the Commission cons iders 
that this does not mean that the operation will remove an important competitive 
constraint . This is first, because in relation to both grades, one of the Parties is 
                                                 
19  The Notif ying Party estimates the total global and EEA market size for BASF 3114 in 2017 to be […] MT (USD […]) and […] 
MT (USD […]), respectively . 
20  Replies to question 18 of Q1 – questionnaire to producers of antioxidants and replies to question 16 of Q3 – questionnaire to 
customers of antioxidants.  
21  Replies to question 21 of Q3 – questionnaire to customers of antioxidants.  
22  Replies to question 2 2 of Q3 – questionnaire to customers of antioxidants.  
 
 
 
9 active on the markets concerned as a mere reseller  based o n non -exclusive 
distributio n agreement s. Second,  as explained above, alternative producers to SI 
Group and Addivant will remain an important competitive constraint to the 
merged entity . Finally, some  customers  actually stated that the Transaction  is 
likely to have pro -competitive effects since it would allow the merged entity to 
better compete with two major antioxidant  supp liers that are able to offer a wide 
spectrum of phenolic antioxidants, namely BASF and Songwon.23   
 
4.1.4.  Conclusion on horizontal effects  
 
(36) For the reasons set out in Section 4.1.3 , the Commission concludes that the 
Transaction does not raise serious doubts as to its compatibility with the internal 
market in the markets for the supply of solid OPHs and the supply of phenolic 
antioxidants ( and of its plausible segments ) both at EEA and global level  due to 
horizontal effects.   
 
B. Vertical overlaps  
 
(37) A vertical merger may result in anticompetitive effects due to foreclosure. 
Foreclosure concerns a situation where th e actual or potential rivals’ access to 
supplies or markets is hampered or eliminated as a result of the merger, thereby 
reducing those companies’ ability and/or incentive to compete. Two forms of 
foreclosure can be distinguished in a vertical relationship : input and customer 
foreclosure. The first is where the merger is likely to raise the costs of 
downstream rivals by restricting their access to an important input (input 
foreclosure). The second is where the merger is likely to foreclose upstream rivals 
by restricting their access to a sufficient customer base (customer foreclosure).24 
 
(38) Input foreclosure arises where, post -merger, the new entity would be likely to 
restrict access to the products or services that it would have otherwise supplied 
absent the merger, thereby raising its downstream rivals' costs by making it harder 
for them to obtain supplies of the input under similar prices and conditions as 
absent the merger.25  
 
(39) Customer foreclosure may occur when a supplier integrates with an important 
custo mer in the downstream market. Because of this downstream presence, the 
merged entity may foreclose access to a sufficient customer base to its actual or 
potential rivals in the upstream market (the input market) and reduce their ability 
or incentive to com pete. In turn, this may raise downstream rivals' costs by 
                                                 
23  Replies to question 30 of Q3 – questionnaire to customers of antioxidants.  
24  Non-Horizontal Guidelines, paragraphs 29 –30. 
25  Non-Horizontal Guidelines, paragraph 31.  
 
 
 
10 making it harder for them to obtain supplies of the input under similar prices and 
conditions as absent the merger.26 
 
(40) For an input or customer foreclosure scenario to raise competition concerns, thr ee 
cumulative factors need to be taken into account: (i) the ability of the merged 
entity to engage in foreclosure; (ii) the incentives of the merged entity to do so; 
and (iii) whether a foreclosure strategy would have a significant detrimental effect 
on competition in the downstream market.27 
 
(41) As explained in recital (9) the Transaction gives rise to vertically affected markets 
because of the activities of the production by one of the Parties of speciality 
chemicals that are used by the other Party in the p roduction of a variety of other 
chemicals. This Decision will analyse whether the Transaction is likely to raise 
serious doubts as to its compatibility with the internal market due to input or 
costumer foreclosure in those market where the activities of th e Parties are 
vertically linked.  
 
4.2. 2,4 and 2,6 DTBP as an input material for the production of solid OPH 
and phenolic antioxidant s  
4.2.1.  2,4 and 2,6 DTBP (upstream ) 
 
4.2.1.1.  Relevant product market  
(42) 2,4 and 2, 6 DTBP are organic compounds which belong to the broader category 
of alkylphenols. They are stored in liquid form at  high temperatures .  
 
(43) 2,4 DTBP is mostly  used as an intermediate raw material in the production  of 
secondary solid OPHs antioxidants. 2,6 DTPB is mostly used as an intermediate 
raw material in the production of phenolic antioxidants.28  
 
(44) The Commission has not assessed the markets for 2,4 DTBP and 2,6 DTBP in the 
past.  
 
(45) According to the Notifying Party, there are no substitutes for 2,4 DTBP and 2,6 
DTBP from a demand -side perspective. However, it argues that there is some 
supply -side substitutability both between 2,6 and 2,4 DTBP themselves, and 
between 2,6 and 2,4 DTBP, on the one side, and other alkylphenols  chemical 
products that are manufactured using similar distillation equipment, on the other 
side.  
 
                                                 
26  Non-Horizontal Guidelines, paragraph 58.  
27  Non-Horizontal Guidelines, paragraphs 32, 59.  
28  According to the data provided by the Parties, virtually all 2,4 DTBP produced in the market (99.6%) is used in solid OPHs, 
while virtually all 2,6 DTBP produced in the market (95.6%) is use d in phenolics.  
 
 
 
11 (46) The market investigation indicated that there is limited substitutability between 
2,4 DTBP and 2,6 DTBP both from the supply side and demand side. On the one 
hand, producers explained that while it  is possible to produce 2,4 and 2,6 DTBP  
as part of the same manufacturing process, suppliers that have dedicated lines for 
each type of product cannot easily switch between the two .29 On the other hand, 
market participants  explained that it not possible to  substitute 2,4 and 2,6 DTBP 
either with each other , or with other chemical products  in the production process 
for solid OPHs and phenolics, respectively .30 The market investigation did not 
provide evidence suggesting that further segmentations of the markets concerned 
should be considered.  
 
(47) In conclusion , the Commission considers that, for the purpose of th is Decision , 
the question of whether 2,4 and 2,6 DTBP belong to the same product market 
(potentially including all alkylphenols ) can be left open, since the Transaction 
does not raise serious doubts as to its compatibility with the internal market, 
regardless of the exact product market definition.  
 
4.2.1.2.  Relevant geographic market  
(48) The Notifying Party argues that the markets for 2,4 DTBP and 2,6 DTBP are at 
least EEA -wide, with indications of the existence of global markets. This would 
mainly  be due to low transportation c osts and import duties  into the EEA .  
 
(49) The market investigation provided mixed results as to  the geographic scope of the 
markets for 2,4 and 2,6  DTBP. According to both suppliers  and customers, the 
vast majority of DTBP is sold within the same region as wh ere it is produced.31  
 
(50) The majority  of customers responding to the market investigation explained there 
are some  barriers to tran sport DTBP over long distances, in particular due to 
transport costs and longer delivery times.32 Geographic proximity  of suppliers  is 
not considered a crucial characteristic when selecting  a provider , but in light of 
the shorter lead times and lower transportation costs , customers do consider it 
preferable .33 Customers  located  in the EEA however  also explained that in 
response to a small but significant non -transitory increase in price (in the order of 
5-10%), they would  attempt to  import DTBP from outside the EEA.34 
                                                 
29  Replies to question 5 of Q2 – questionnaire to DTBP and 6 -BOC producers.  
30  Replies to questions 10 and 11 of Q2 – questionnaire to DTBP and 6 -BOC producers, and replies to questions 28 and 29 of Q2 – 
questionnaire to DTBP and 6 -BOC prod ucers.  
31  Replies to questions 12 and 13 of Q2 – questionnaire to DTBP and 6 -BOC producers and replies to question 30 (and 
subquestions) of Q1 – questionnaire to producers of antioxidants.  
32  See Question 33 of Q1 – questionnaire to producers of antioxidan ts.  
33  See Question 38 of Q1 – questionnaire to producers of antioxidants. According to a competitor, "DTBP is shipped all over the 
world, but the transport has to meet specific requirements. According to […], the product can be shipped in a heated contai ner, 
or can be shipped and heated upon arrival." (Non -confidential version of the minutes of the conference call with a competitor 
dated 27 August 2018, para. 13).  
34  Replies to questions 18 and 19 of Q2 – questionnaire to DTBP and 6 -BOC producers.  
 
 
 
12 (51) In conclusion , the Commission considers that, for the purposes of th is Decision , 
the exact scope of the geog raphic  market definition for the supply of 2,4 and 2,6 
DTBP can be left open, since no serious doubts as to the compatibility of the 
Transaction with the inter nal market arise, regardless of the geographic scope of 
the market concerned.  
 
4.2.2.  Phenolic and solid  OPH antioxidants (downstream)  
 
(52) The Commission has defined the relevant product and geographic market s for 
phenolic and solid OPH antioxidants in Sections 4.1.1 and 4.1.2 . 
 
4.2.3.  Competitive  assessment  
 
(53) SI Group produces and supplies 2,4 and 2,6 DTBP, input material used in the 
production of phenolic and s olid OPH antioxidants. Addivant  and SI Group use 
2,6 DTBP as a critical input to produce phenolic antioxidants and  2,4 DTBP as a 
critical input to produce solid OPHs antioxidants. While Addivant is not verti cally 
integrated  upstream , SI Group produces 2,4 and 2,6 DTBP in the US, Singapore 
and Europe (Switzerland).  
 
(54) The Transaction therefore gives rise to a vertical relationship between SI Group' 
activities on the upstream markets for DTBP and the Parties' ac tivities on the 
downstream markets for phenolic and solid OPH antioxidants .35 .  
 
Market structure  
(55) As shown in the Table below, o n the upstream market  for 2,4 DTBP  SI Group 
holds a market share of [40-50]%  worldwide and [70-80]%  in the EEA ,36 both in 
volume and in value. SI Group's main competitors at global level are Tasco and 
Jiyi Chemical , with market shares of [20-30]%  and [10-20]% , respectively. In the 
EEA, besides SI Group, other two suppliers are active on the market: Sasol ( [20-
30]%  market share) and Sterlitamak ( [5-10]% ). On the market for 2,6 DTBP  SI 
Group holds a market share of [40-50]%  worldwide and [50-60]%  in the EEA ,37 
both in volume and in value.  Similarly to 2,4 DTBP, SI Group's main competitors 
globally are Tasco and Jiyi Chem ical, with market shares of [20-30]%  and [10-
20]% , respectively. In the EEA, besides SI Group, other three suppliers are active 
                                                 
35  The question of whether the market for phenolics should be further segmented based on grades is not relevant for the purpose of 
the assessment of the present vertical link. This is because any potential foreclosure strategy would concern the different g rades 
of phenolics, and not certain specific grades (such as those where the Parties' activities overlap). Therefore, for the purpos e of 
the competitive assessment, reference will be made to the overall market for the supply of phenolics.  
36  Excluding captive sa les (both for the Parties and their competitors). If the market for the supply of 2,4 DTBP would cover the 
EEA and Switzerland, SI Group's market share would be [90-100]%, both in volume and in value. This is explained by the fact 
that SI Group's main cust omer in Europe – [customer ] – has an antioxidants' plant in Switzerland.  
37  Excluding captive sales (both for the Parties and their competitors). If the market for the supply of 2,6 DTBP would cover th e 
EEA and Switzerland, SI Group's market share would b e [80-90]%  in value and [80-90]% in volume. This is explained by the 
fact that SI Group's main customer in Europe – [customer ] – has an antioxidants' plant in Switzerland.  
 
 
 
13 on the market: Oxiris ( [30-40]%  market share), Sterlitamak ( [10-20]% ), and 
Tasco ( [0-5]%). 
 
Table  3: SI  Group 's and its competitors' market shares (in volume, MT) on the merchant markets for 2,4 
DTBP and 2,6 DTBP in 201738 
1.  UPSTREAM  
2.  2,4 DTBP  2,6 DTBP  
3.  EEA  Global  EEA  Global  
SI Group  [70-80]%  [40-50]%  [50-60]%  [40-50]%  
Tasco  [0-5]% [20-30]%  [0-5]% [20-30]%  
Jiyi Chemical  [0-5]% [10-20]%  [0-5]% [10-20]%  
Chang Chun  [0-5]% [5-10]%  [0-5]% [5-10]% 
Zibo  [0-5]% [0-5]% [0-5]% [0-5]% 
Sasol  [20-30]%  [0-5]% [0-5]% [0-5]% 
Oxiris  [0-5]% [0-5]% [30-40]%  [0-5]% 
Sterli tamak  [5-10]%  [0-5]% [10-20]%  [0-5]% 
Songwon  [0-5]% [0-5]% [0-5]% [0-5]% 
Others  [0-5]% [5-10]%  [0-5]% [0-5]% 
Total  100%  100%  100%  100%  
Source: Form CO  
 
(56) On the downstream market  for both phenolics and solid OPHs antioxidants, the 
Parties hold combined market shares below 20% (in volume and value), both at 
EEA and worldwide level.   
 
Table 4: SI Group 's market shares (in volume, MT) on the markets for 2,4 DTBP and 2,6 DTBP and the 
Parties' market shares (in volume, MT) on the markets for solid OPH and phenolic antioxidants in 201739 
 UPSTREAM  
4.  2,4 DTBP  2,6 DTBP  
5.  EEA  Global  EEA  Global  
SI Group  [70-80]%  [40-50]%  [50-60]%  [40-50]%  
 DOWNSTREAM40 
 Solid OPHs  Phenolics  
 EEA  Global  EEA  Global  
SI Group  [0-5]% [5-10]% [0-5]% [0-5]% 
Addivant  [0-5]% [10-20]%  [5-10]%  [5-10]%  
COMBINED  [5-10]% [10-20]%  [5-10]% [10-20]%  
Source: Form CO  
 
(57) Since only SI Group is active on the markets for the supply of 2,4  DTBP and 2,6 
DTBP, the only change brought about by the Transaction is the increment in the 
Parties' position on the downstream markets for antioxidants  (solid OPHs and 
                                                 
38  The Notifying Party submits that the market shares of the Parties did not substantially differ in the past three years. Market 
shares in value would not substantially differ from market shares in volume.  
39  The Notifying Party submits that the market shares of the Parties did not substantially differ in the past three years. Mar ket 
shares in value would not substantially differ from market shares in volume.  
40  According to the Notifying Party, solid OPH antioxidants are only used in polymers and not in other applications. Moreover, 
given that virtually all phenolics are used for  polymers applications, the market shares reported in the Table refer to antioxidants 
used in polymers specifically.  
 
 
 
14 phenolics). However , SI Group's activities in antioxidants  pre-Transaction are 
limited and the market share increment brought about by Addivant's activities is 
in the range of 5 -10%.  
 
Customer foreclosure  
(58) Addivant does not purchase 2,4 and 2,6 DTBP in the EEA. Its total purchases of 
2,4 and 2,6 DTBP in 2017 only represented [10-20]%  and [0-5]%, respectively, of 
the total global demand. In addition, since  Addivant already purchases, pre -
Transaction, the vast  majority of its DTBP needs from SI Group, the operation  is 
unlikely to  bring any relevant change . The market investigation did not reveal 
specific concerns in this respect. In particular, the only supplier of Addivant for 
DTBP other than SI Group, i.e. Ta sco, d oes not believe the Transaction will have 
adverse effects on its ability to access DTBP customers.41  
 
(59) In conclusion, in light of the  above considerations and taking the outcome of the 
market investigation into account, the Commission considers that it is unlikely 
that the Transaction w ould lead to a significant increas e in customer foreclosure 
risks in relation to the supply of 2,4 and 2,6 DTBP , in the EEA and globally . 
 
Input foreclosure   
 
(60) In the context of th e present Decision, input foreclosure relates to the possibility 
of the merged entity to restrict access  to or increase price of  input s to competing 
phenolics and solid OPH  producers , i.e. to restrict access to the DTBP produced 
by SI Group  to Parties' competitors  downstream .  
 
a)   Ability  to foreclose   
(61) The Notifying Party argues that the merged entity  would not have the ability to 
foreclose  its competitors downstream . It submits  that [customer]  is the only 
relevant customer purchasing significant quantities of 2,4 DTBP and 2,6 DTBP 
from SI Group  and that input foreclosure concerns should be dismissed in view of 
the following arguments : 
 
(i) There are several alternative suppliers for DTBP active either in the EEA 
and/or globally  (such as Tasco, Jiyi Chemical, Sasol, Oxiris, Chang 
Chun) , with [customer]  already sourcing from some of them (even for its 
EEA plants) , and no barriers to switch  suppliers ; 
 
(ii) The alternative suppliers active on the merchant market have substantial  
levels of spare capacity ; 
                                                 
41  Replies to question 61 of Q2 - questionnaire to producers of DTBP and 6 -BOC.  
 
 
 
15  
(iii) Vertically integrated suppliers that are not ac tive yet on the merchant 
market  could easily start suppl ying DTBP to third parties ; and  
 
(iv) [Customer]  enjoys a substantial bargaining power, since it is a very 
important customer for DTBP - as it is the market leader for antioxidants 
(both in the EEA and globally) - and exerts a credible threat to either 
backward integrate in the production of DTBP or spo nsor the entry and/or 
expansion of DTBP supplier(s).   
 
(v) The contract between SI Group and [customer]  for the supply of DTBP in 
Europe and North America runs until […] with guaranteed volumes and 
no possibility to unilaterally increase prices.  
 
(62) It appears fr om the evidence available to the Commission that [customer]  is 
indeed the only relevant  customer of  SI Group for  2,4 and 2,6 DTBP that could be  
significantly  impacted by the Transaction. [Customer]  accounts for [a large share]  
of SI Group's total sales of 2,4 DTBP and [a large share]  of its sales of 2,6 DTBP  
globally . As one respondent to the market investigation noted: " [Customer]  is the 
only large producer of antioxidants which is not backward integrated upstream 
and might be  impacted by a reduced availability of DTBP ".42 
 
(63) In order for input foreclosure to raise competition concerns, the relevant input 
must be an important input for the downstream product and the merged entity 
must have a significant degree of power in the upst ream market.43 In the present 
case, both conditions are fulfilled since (i) 2,4 DTBP represents up to [50-60]%  of 
the final price of solid OPH antioxidants and 2,6 DTBP represents up to [40-50]%  
of the final price of phenolic antioxidants ;44 and (ii) SI Grou p's market share on 
the market for DTBP is approximately [50-60]%  worldwide and go es up to [70-
80]%  in relation to the supply of 2,4 DTBP in the EEA.  
 
(64) The result s of the market investigation  revealed that SI Group is indeed perceived 
by both customers and  suppliers of DTBP as the most important supplier  of this 
product , both in the EEA and globally.45 However, t he market investigation also 
revealed that several Asian suppliers are active on the global market, and that they 
produce DTBP with comparable quali ty to the products manufactured in Europe 
or the US. In addition, the investigation indicated  that DTBP could possibly be 
                                                 
42  Replies to question 61 of Q2 - questionnaire to producers of DTBP and 6 -BOC.  
43  Non-horizontal Merger Guidelines, paras. 34 and 35.  
44  Annex 47 of the Form CO. This was also confirmed by the market investigation (replies to questions 45 and 46 of Q1 – 
Questionnaire to producers of antioxidants).  
45  Repl ies to questions 22 and 23 of Q2 – questionnaire to DTBP and 6 -BOC producers and replies to question 39 of Q1 – 
Questionnaire to producers of antioxidants.  
 
 
 
16 imported into the EEA from Asia, and thus, (at least some) Asian suppliers might 
constitute an alternative source of supply for customers located in the EEA.46  
 
(65) While the market investigation did not confirm the Parties' claim that vertically 
integrated suppliers of DTBP would have the  capacity to supply third parties ,47 it 
appears that some competitors , such as  Tasco  in particular , have spare capacity 
and/or plans of expansion.48 In addition, it seems that a new player based in India 
is likely to enter the market for DTBP within the next two to three years .49  
 
(66) Against the above background, the Commission considers that [customer] , as the 
leader on the  market for antioxidants  (both in the EEA and globally),  exerts a 
credible threat to either backward integrate in the production of DTBP or sponsor 
the entry and/or expansion of DTBP supplier(s) . This was confirmed by 
[customer]  itself  which indicated that there are alternatives to SI Group  as DTBP 
supplier, but those alternatives need to be developed further and this might up to  
three  years .50 Yet, the contract between SI Group and [customer]  for the supply of 
DTBP in Europe and North Am erica runs until […] with guaranteed volumes and 
no possibility to unilaterally increase prices, which would give  [customer]  
sufficient time to find alternative suppliers  (including sponsoring 
entry/expansion), or start its own production, in the event the  merged entity would 
reduce its output or attempt to increase the price of DTBP . 
 
(67) Therefore, it appears more likely than not that the merged entity will not have the 
ability to foreclosure downstream competitors. In any event , even in the 
hypothesis that the merged entity would have the ability to foreclose downstream 
competitors, it will not have the incentive to do so, as explained in the following 
Section.  
 
 b)   Incentive to foreclose  
(68) The incentive to foreclose generally depends on the degree to which f oreclosure 
would be profitable.  
 
(69) The Notifying Party argues that SI Group would not have the incentive to 
foreclose its competitors downstream in light of the following main arguments:  
 
                                                 
46  Replies to question 42 of Q1 – questionnaire to producers of antioxidants.  
47  Non-confidential ve rsion of the minutes of the conference call with a competitor dated 3 August 2018, para. 14.  
48  Replies to question 21 of Q2 – questionnaire to producers DTBP and 6 -BOC.  
49  Replies to question 30 of Q2 – questionnaire to producers DTBP and 6 -BOC.  
50  Non-confidential version of the minutes of the conference call with [customer ] dated 27 August 2018. During this conference 
call, [customer ] explained that, as part of the alternatives, it could (i) source part of its needs of DTBP from Asian suppliers ; and 
(ii) decide to backward integrate into DTBP if the demand supply balance of the DTBP market would change in such a way to 
make economically sense for [customer ] to invest into the manufacturing of DTBP .  
 
 
 
17 (i) SI Group already supplies, pre -Transacti on, downstream competitors 
(notably [customer]51);  
 
(ii) [Customer]  is overall  a very relevant customer of the comb ined entity, 
representing around  [a sizeable portion ] of its tur nover (in the EEA and 
globally);   
 
(iii) Even if the merged  entity would prioritise its own downstream production 
(including [potential]  capacity expansions by Addivant for the next 5 
years), it would still have substantial spare capacity and will be able to 
serve all of its existing customers, worldwide ; and 
 
(iv) Any effort to reduce its presence on the upstream merchant market or to 
increase its prices would just cause SI Group to lose sales and profits 
upstream which cannot be compensated in the downstream market. This is 
because not enough of [customer]  lost sales on the downstream market 
would be diverted to the merged entity, in light of the limited market 
shares and downstream capacities of the Parties, and the competitiveness 
of the antioxidants markets .52 
 
(70) Against that background,  and following the results of th e market investigation,  
the Commission takes note of the following  considerations . 
 
(71) First, already pre -Transaction SI Group is vertically integrated and nevertheless 
does suppl y DTBP to its downstream competitors, and in particular to [customer] . 
Therefore, the only merger -specific variation brought about by the Transaction is 
the potential change in incentive to foreclose competitors  (and in particular, 
[customer] ), result ing from the acquisition of additional  (limited) downstream 
activities. The question therefore arises whether the additional volumes 
downstream would provide incentive to internalize more of the upstream 
capacity. In this context the Commission notes that t he merged entity's  
downstream capacity […] both in the EEA and globally  […] would [not]  be 
sufficient to absorb a significant proportion of its upstream capacity . In addition, 
the Notifying Party submit s that utilisation rates of the current downstream 
capacity are […].53 Furthermore, the market investigation revealed that expandi ng 
antioxidant  production capacity to a n appreciable extent, e.g. by constructing a 
new plant, would require significant investments both in terms of time and 
costs.54  
                                                 
51  With a contract running until […]. Base price s are [information  on prices] . 
52  To support their claims, the Notifying Party submitted an economic assessment, including a diversion ratio analysis.  
53  Annexes 39 and 51 of the Form CO.  
54  Non-confidential version of the minutes of the conference call wi th a competitor dated 16 August 2018 : "[…] a new plant would 
require an investment of 100 million dollars"  and non -confidential version of the minutes of the conference call with a 
competitor dated 3 August 2018: "(…) the Parties are a small player on the market for antioxidants and they would need to 
 
 
 
 
18 (72) Second , based on the data provided by the Parties, the total upstream effective 
production capacity of SI Group would be sufficient to supply all of its current 
customers for 2,4 and 2,6 DTPB, even under the assumption that both Addivant 
and SI Group were to absorb  their respective  maximum capacity downstream 
[…]. In addition , based o n the data provided , the merged entity would have 
sufficient  effective capacity to keep supplying  all of its customers in the EEA and 
Switzerland from its European  product ion plant  (located in Switzerland ). 
 
(73) Third, although Addivant's profit margins on the  downstream markets are […] 
than SI Group's , the merged entity's upstream and downstream profit margins 
woul d not be significantly different . This means that the potential increase in 
profit margins  resulting from additional downstream sales  is unlikely, p er se, to 
change the incentive for the merged entity to supply  competitors with  the 
upstream products in any appreciable manner. Moreover, it should be note d that 
[customer] represents about  [a sizeable portion ] of the  merged entity's total sales  
(both in the EEA and globally) and [a large portion ] of SI Group's intermediate 
plastics additives busin ess' operational margin and volumes sold ( 2017  data) . 
Therefore, any loss of DTBP sales to [customer] , if not compensated with 
sufficient gains downstre am, is likely to  have an adverse impact on the merged 
entity's operations  overall .  
 
(74) Fourth, the Commission notes that, as explained in Section 4.1.3, Addivant and SI 
Group are not among the main suppliers of antioxidants  either in the EEA or 
globally . [Capacity information]  and they face  several players active on the 
market, including top suppliers like BASF and Songwon. Therefore, should the 
merged entity decide to reduce output on the upstream merchant market, it is 
unlikely that its loss of sales ups tream would be compensated by an increase in 
sales downstream. This is because  [competitor’s]  hypothetical  loss of  sales in the 
antioxidant market s (due to a hypothetical foreclosure) is unlikely to be diverted 
to a significant extent to the merged entity.  This is because Addivant is not a 
particularly close competitor to [competitor’s] . Indeed, based on the results of the 
market investigation, it is more likely that [competitor’s]  lost sales would be 
diverted to other  players, such as Songwon, who compete more closely with 
[competitor]  (see Section 4.1.3 ) and is vertically integrated, i.e. does not depend 
on SI Group for the supply of DTBP materials.  
 
(75) Fifth , the Commission notes that, generally speaking, the past behaviour can also  
provide useful guidance  to understand the likely impact of a transaction in some 
situations . In this respect, it should be noted that SI  Group acquired its 
downstream antioxidant business  from Albemarle in 2014.  Conceptually, the 
situation was similar to that of the present Transaction in the sense that vertical 
                                                                                                                                                 
make significant investments [EUR 200 -300 million] in order to increase their production capacity downstream and absorb 
their entire production of 2,4 and 2,6 DTBP."  
 
 
 
19 integration could have given SI Group  an incentive to manipulate supply of 2,6 
and 2,4 DTBP to favo ur its newly  acquired antioxidan t business and to 
disad vantage Albermarle’s  competitors (including Addivant and [customer] ). 
However, after the operation, SI Group continued to supply both Addivant and 
[customer] with DTBP products, without increasing prices. As already explained, 
the change in downstream acti vities brought by the present acquisition  is limited, 
thus it is more likely than not that the merged entity will behave as it did in the 
past in comparable situations.  
 
(76) Finally , while some market participants expressed generic  concerns in relation to 
the merged entity becoming more vertically integrated, it appears that such 
concerns relate more  specifically to the fact that the merged entity may become 
more competitive on the downstream markets, in light of cost advantages. This is 
particularly the case b ecause, as explained above, [customer]  is the only customer 
purchasing significant quantities of DTBP  from SI Group . In relation to the 
impact of the Transaction, [customer]  explained that they " do not expect SIG to 
stop supplying [customer]  completely. Sh ort term, it would be very difficult for 
SIG to allocate their DTBP capacities to other antioxidant producers. This may 
change in case SK Capital would decide to expand further their antioxidant 
production capacity and SIG would allocate their DTBP capacit ies for captive 
use".55
 In light of the […] plans […] of the merged entity over the next five years on 
the downstream markets, the high costs to engage in significant expansion capacity 
strategies  downstream , and the fact that [customer]  is protected for the next […] by 
its contract with SI  Group , it appears unlikely that the merged entity could absorb its 
captive production of DTBP to any significant extent.   
 
(77) In light of the above, the Commission considers that the Transaction is unlikely to 
change the i ncentive s for the merged entity to supply upstream products (2,4 and 
2,6 DTBP) to its downstream competitors.  
 
(78) In light of the above considerations and of the outcome of the market 
investigation, the Commission considers that the Transaction does not give rise to 
serious doubts as to its compatibility with the internal market in relation  to the 
vertical relationship between the supply of  2,4 and 2,6 DTBP (upstream) and the 
supply of phenolic and solid OPH antioxidants  (downstream).   
 
4.3. 6-BOC as an input material for the production of phenolic antioxidants  
 
(79) The Transaction  gives rise to a vertical overlap between SI Group’s upstream 
supply of 6 -BOC and Addivant’s  downstream production of primary phenolic 
antioxidants.  
                                                 
55  Non-confidential version of the minutes of the conference call with [customer ] dated 27 August 2018, page 4.  
 
 
 
20 4.3.1.  6-BOC (upstream product)  
 
(80) 6-BOC  is a chemical intermediate  belonging to the wider chemical group of 
alkyphenol that  is used in the downstream production of specific grades of 
phenolic antioxidants. Addivant  uses 6 -BOC fo r its downstream production of a 
specific grade of  phenolic antioxidant  (BASF 245)56 used in the production of 
polyethylene cables . To the best of the Notifying Party's knowledge, 6 -BOC is 
also used as  an input chemical for the p roduction of another grade of phenolic 
antioxidant ( BASF 80)57, which is used f or the stabilization of polyolefins and 
other plastics.58 
 
(81) The Commission has not previously analysed the market for 6 -BOC.  
 
(82) With respect to the product market definition, t he Notifying Party considers that 
the question of whether 6 -BOC represents a product market on its own or whether 
it is part of a wider  product market  can be left open . The market investigation 
provided evidence that 6 -BOC cannot be replaced by other chemi cals in the 
production process of the finished goods it is used for, pointing toward a relevant 
market at the product level.59 
 
(83) In con clusion , for the purpose of the present case, the exact scope of the product 
market definition for 6 -BOC can be left open, since the Transaction does not raise 
serious doubts as to its compatibility with the internal market, regardless of the 
product market definition.  
 
(84) With res pect to the geographic market definition, while the Notifying Party 
ultimately believes that the precise scope of the market can be left open, it 
considers the geographic market to be global, since 6 -BOC is easily transportable  
and transport costs and import duties into the EEA are low. This finding was 
confirmed by the re sults of the market investigation .60  
 
(85) In conclusion , the Commission considers that, for the purposes of th is Decision , 
the exact scope of the geographic  market definition for the supply of 6-BOC can 
be left open, since no serious doubts as to the compatibi lity of the Transaction 
with the inter nal market arise, regardless of the geographic scope of the market 
concerned.  
 
                                                 
56  Chemical Name: Ethylene bis(oxyethylene) bis -(3-(5-tert-butyl -4-hydroxym -tolyl)propionate . 
57  Chemical Name: 3,9 -bis{2 -[3-(3-tert-butyl -4-hydroxy -5-methylphenyl)propionyloxy] -1,1-dimethyl} -2,4,8,10 -
tetraoxaspiro[5,5]undecane. 
58  SK Capital does not produce BASF 80. SI Group neither produces BASF 245 nor BASF 80.  
 To the best of the Notifying Party's knowledge, BASF 80 and BASF 245 are the only  products using 6 -BOC as an input material 
for their production.  
59  Replies to question 65 (and sub -questions) of Q1 – questionnaire to producers of antioxidants.  
60  Replies to questions 67 and 68 of Q1 – questionnaire to producers of antioxidants.  
 
 
 
21 4.3.2.  Phenolic antioxidants (downstream product)  
 
(86) The Commission has defined the relevant product and geographic market for 
phenolic antioxidants  in Sections 4.1.1 and 4.1.2 . 
 
4.3.3.  Competitive assessment  
   
(87) SI Group sells 6 -BOC to Addivant on a spot basis for its producti on of BASF  
245. SI Group had […] sales of 6 -BOC to Addivant in 2017 and has made […] 
sales of this chemical to Addivant in 2018 (amounting to […] of SI  Group’s total 
sales of 6 -BOC in 2018).  
 
(88) On the upstream  market for 6 -BOC, SI Group had  a market share of [20-30]%  
worldwide in 2017  and was the only supplier of 6 -BOC in the EEA over the 
period 2015 -2017 . The market investigation revealed that SI Group's market share 
worldwide is likely to have been underestimated, fact that will be taken into 
account in the competitive analysis.  
 
(89) On the downstream  market for phenolic antioxidants, the Parties' combined  
market  share remains  below [10-20]%  (in volume and in value), both globally and 
in the EEA  over the period 2015 -2017 . On the narrower hypothetical market for 
BASF  245, the Notifying Party estimates i ts market share to be below [0-5]%, 
both at EEA and global  level.  
 
(90) Based  on the available evidence, t he Commission considers that the Transaction 
will not result in either input or customer foreclosure for the following reasons.  
 
(91) Input foreclosure  is unlik ely in the EEA given the fact that Addivant is the only 
customer of 6 -BOC in the EEA and it already sources the entirety of its needs 
from SI Group.61 At worldwide level, even though the market investigation 
revealed that SI Group's market share is likely to have been underestimated, it 
also showed that there are sufficient  alternative  suppliers of 6 -BOC on the market 
to which customers could turn to.62 In any event, SI Group's sales to Addivant  
(which is sourcing the entirety of its needs from SI Group) are so marginal 
(EUR  […]) compared  to its total sales of 6 -BOC (EUR […]) that any input 
foreclosure strategy would only result in significant loss of prof its for SI Group . 
 
(92) Similarly, customer foreclosure  is unlikely to occur since Addivant represents less 
than [0-5]% of the total demand for 6 -BOC, which it entirely sourced from SI 
Group, its only approved supplier. Suppliers of 6 -BOC will therefore have a large 
array of customers to turn . 
                                                 
61  SI Group supplies […]. The current contract runs until […] with [infor mation on prices] . 
62  Replies to question 79 of Q1 – questionnaire to producers of antioxidants.  
 
 
 
22 (93) In light of the above considerations, the Commission conclusively considers that 
the Transaction does not raise serious doubts as to its compatibility with the 
internal market with respect to the vertical relationship between SI Group's supply 
of 6 -BOC (upstream) and the Parties' production of phenolic antioxidants  
(down stream) under any of the alterna tive market definitions . 
 
4.4. OSBP as an input material for the production of DNBP  
 
4.4.1.  OSBP (upstream)  
 
(94) OSBP  is an industrial chemical raw material belonging  to the wider chemical 
group of alkylphenols that is manufactured by reacting Butene -1 with phenol. 
OSBP is used in dying and as a chemical intermediate for the production of 
polymer inhibitors  (such as DNBP), pesticides, fuel additives and stabiliser 
intermediates.  SI Group produces OSBP at two producti on sites in Switzerland 
and the United States.  
 
(95) The Commission has not previously analysed the market for OSBP.  
 
(96) With respect to the product market definition, t he Notifying Party considers that 
the question of whether OSBP represents a product market on  its own or whether 
it is part of a wider product market can be left open. The market investigation 
provided evidence that OSBP cannot be replaced by other chemicals in the 
production of the downstream applications  but was inconclusive on the question 
of whether the OSBP market should be further segmented.63  
  
(97) In conclusion , the Commission considers that, for the purpose of the present case, 
the precise product market definition can be left open, since the Transaction does 
not raise serious doubts as to its  compatibility with the internal market, regardless 
of the exact product market definition.  
 
(98) With respect to the geographic market definition, while the Notifying Party 
ultimately believes that the precise scope of the market can be left open, it 
considers  the geographic market to be global, since OSBP is easily transportable  
and transport costs and import duties into the EEA are low. SI Group further 
submits that approximately [20-30]%  of the OSBP  it produced outside the EEA 
was sold into the EEA over the period 2015 -2017.  
 
(99) The results of the market investigation did not entirely support the Notifying 
Party's views.  If customers confirmed that there are no specific technical 
characteristics of OSBP that would impact its transportation across regions,64 the 
                                                 
63  Replies to questions 5 and 6 of Q7 – questionnaire to customers of OSBP and producers of polymer inhibitors.  
64  Replies to question 8 of Q7 – questionnaire to customers of OSBP and producers of polymer inhibitors.  
 
 
 
23 market investigation also revealed that the need for a REACH -registration  for this 
specific product limits  in practice customers'  possibil ity to import OSBP into the 
EEA .65 Indeed , SI Group is the only company  which is REACH -registered and 
therefore allowed to sell OSBP in the EEA .66  
 
(100)  In light of the above, and on the basis of the information made available to it, the 
Commission considers that the market is likely to be EEA in scope.  
 
(101)  In conclusion , the Commission considers that, for the purposes of the present 
case, the exact scope of the geographic  market definition for the supply of OSBP 
can be left open, since no serious doubts as to the compatibility of the Transaction 
with the inter nal market ar ise, regardless of the geographic scope of the market 
concerned.  
 
4.4.2.  DNBP ( downstream ) 
 
(102)  DNBP  a type  of polymer inhibitor that is used to stabilize the styrene monomer.  It 
can be sold “neat” or in diluted form.  Addivant produces […] its DNBP in […]. 
 
(103)  The Commission has not previously analysed the market for DNBP .  
 
(104)  With respect to the product market definition, the Notifying Party argues  that 
demand and supply side substitutability exist with other polymer inhibitors. 
According to the Notifying Party, other polymer inhibitors , such as 
dinotrophenols, stable free radicals, and a new green polymer inhibitor produced 
by Suez67, can be used by customers to stabilize the styrene monomer, and 
producers of DNBP can easily switch productio n to other polymer inhibitors (f or 
example, Addivant understands that Chinese suppliers of dinotrophenols have 
recently switched to the production of DNBP ). However, the Notifying Party  
submits that the product market should  be considered at the product level (that is, 
DNBP) , without the need to segment it further according to the form (neat or 
diluted) of the DNBP.  
 
(105)  The market inves tigation did not support  the P arties ' view with respect to the 
supply -side substitutability. Specifically, suppliers also explained that DNBP is 
manufactured with the use of dedicated equipment68. However, the market 
investigation provided evidence that there are alternative products to DNBP that 
                                                 
65  Replies to question 10 of Q7 – questionnaire to customers of OSBP and producers of polymer inhibitors.  
66  Replies to question 19  of Q7 – questionnaire to customers of OSBP and producers of polymer inhibitors.  
67  The Notifying Party explains that two of Addivant’s customers moved from its product to this new green chemistry product in 
the last 12 months.  
68  Replies to question 27 of Q7 – questionnaire to customers of OSBP and producers of polymer inhibitors.  
 
 
 
24 can be used as retarders in the production of styrene monomer  but they  are largely 
more expensive and less effective.69 
 
(106)  In conclusion , the Commission considers that, for the purpose of the present case, 
the precise product market definition can be left open, since the Transaction does 
not raise serious doubts as to its compatibility with the internal market, regardless 
of the exact product market definition.  
 
(107)  With respect to the geographic market definition, the Notifying Party submits that 
the market for DNBP is regional in scope since DNBP is a very dangerous 
material,  especially in contact with water. As a result, shipping large quantities of 
DNBP is risky , expensive and takes a long time with ocean freight. The results of 
the market investigation  did not support the Notifying Party's views on the 
geographic market and  provided evidence pointing toward the existence of a 
global market : according to market participants,  DNBP can be transported easily 
and transportations costs are low .70  
 
(108)  In conclusion , the Commission considers that, for the purposes of the present 
case, the exact scope of the geographic  market definition for the supply of DNBP 
can be left open, since no serious doubts as to the compatibility of the Transaction 
with the inter nal market arise, regardless of the geographic scope of the market 
concerned.  
 
4.4.3.  Com petitive assessment  
 
(109)  The Notifying Party submits that input foreclosure concerns should be dismissed 
in view of the multiple other sources of supply of OSBP available globally. 
Similarly, the Notifying Party argues that customer foreclosure concerns should  
be dismissed given that Addivant is not a critical path for OSBP suppliers to reach 
the marketplace .71  
 
(110)  On the upstream  market  for OSBP , SI Group holds a market share of [40-50]%  in 
volume and [40-50]%  in value worldwide  in 2017 .72 The market investigation  
however  revealed that SI Group's market share worldwide  is likely to have been  
underestimated, fact that will be taken into account in the Commission's 
assessment. According to the information gathered during the market 
investigation, SI Group is the only  company which is REACH -registered and 
therefore, the only supplier of OSBP in the EEA.   
 
                                                 
69  Replies to question 30 of Q7 – questionnaire to customers of OSBP and producers of polymer inhibitors.  
70  Replies to questions 33 and 34 of Q7 – questionnaire to customers of OSBP and producers of polymer inhibitors.  
71  Form CO, para. 206.  
72  SI Group estimates its global market share  on the OSBP market  to be [30-40]%  in 2015 and [30-40]%  in 2016 (in volume). The 
Notifying Party submits that market shares in value would not substantially differ from market shares in volume.  
 
 
 
25 (111)  On the downstream  market for DNBP, Addivant holds a market share of [20-
30]%  (in volume)  worldwide in 2017 and is not active in the EEA. 73 
 
(112)  With respect to input fore closure , while the result of the market investigation  
indicated that the implementation of input foreclosure strategies post -Transaction  
was unlikely to materialise, it also elicited potential concerns in relation to the 
price of OSBP since purchasers of t his product  whose plants are located in the 
EEA do not have alternative suppliers to SI Group.  
 
(113)  The Commission considers however that the concerns expressed with respect to 
the price increase of SI Group's OSBP are not merger specific, since already pre -
Transaction, SI Group is the only supplier of OSBP in the EEA and could 
therefore have raised its prices. Moreover, it is unclear how the combination with 
Addivant's relatively limited DNBP production, would affect the merged entity's 
incentives to foreclose its downstream competitors.  Already  pre-Transaction, 
Addivant purchase s […] of its OSBP's needs  for the production of its […] of 
DNBP (in 2017) from SI Group .74 Since Addivant would in any event not be able 
to absorb all of SI Group's production of OSBP ( SI Group's sales to Addivant 
represent […] of its total sales of OSBP ), it would therefore be har dly profitable  
for SI Group to discontinue the supplies  of its other customers . This is confirmed 
by respondents to the market investigation which indicated  that that the merged 
entity's production capacity of DNBP would  most likely not be sufficient to 
absorb t he upstream production .75 
 
(114)  Furthermore, the Commission takes the view that it is unlikely that the 
Transaction will result in customer foreclosure  given that Addivant represents just 
around [20-30]%  of the total global demand for OSBP. Suppliers  of OSBP  will 
have a large array of customers to turn to  globally, i.e. Addivant's competitors of 
DNBP such as Nufarm, Nalco, Jilin Jiuxin, etc. but also producers of pesticides, 
fuel additives and stabiliser intermediates .76 Finally, since Addivant sells all its 
DNBP in the United States, the Transaction will not bring about any changes for 
producers of DNBP located in the EEA.  
 
(115)  Hence, the Commission concludes that SI Group will unlikely have the ability or 
the incentive to engage in input and customer foreclo sures following the 
implementation of the Transaction and, in any event, any such strategy is unlikely 
to result in significant anticompetitive effects.  
 
                                                 
73  The Notifying Party submits that the market shares of A ddivant  on the DNBP  market  did not substantially differ in  the past three 
years. Market shares in value would not substantially differ from market shares in volume.  
74  In this respect, it should be noted that Addivant produced DNBP in 2017 at a capacity  utilization rate of approximately […] and 
[…] capacity expan sion.  
75  Replies to question 40 of Q7 – questionnaire to customers of OSBP and producers of polymer inhibitors.  
76  Form CO, paras 200 and 206.  
 
 
 
26 (116)  In light of the above considerations , the Commission considers that the 
Transaction does not raise se rious doubts as to its compatibility with the internal 
market with respect to the vertical relationship between SI Group's supply of 
OSBP  (upstream) and Addivant's  production of DNBP  (downstream) under any 
of the alternative market definitions.  
 
4.5. DIB as an input material for the production of PTOP  
 
(117)  The Transaction gives rise to a vertical overlap between TPC Group (one of SK 
Capital's portfolio companies) upstream supply of DIB and SI Group’s 
downstream production of PTOP.  
 
4.5.1.  DIB (upstream product)  
 
(118)  DIB is a raw material input produced by dimerizing  isobutylene in the presence 
of an acidic catalyst to form a mixture of C8 olefins with an  isoparaffin structure . 
The primary application of DIB is the downstream production of phenolic resins 
(60%), with  the downstream production of other chemical products (including 
PTOP) representing the remaining usage (40%).  
 
(119)  The Commission has not previously analysed the market for DIB.  
 
(120)  With respect to the product market definition, t he Notifying Party considers that 
the market can be defined at the product level for DIB since there are no 
variations of DIB that would require any further segmentation . The market 
investigation supported the views and the Notifying Party and revealed  that there 
is limited demand -side substitutability between DIB and other chemicals since 
customers of DIB cannot replace this product with any other material for the 
production of its downstream application s.77 Suppliers also explained that DIB is 
produced in dedicated plants (together wi th DIB's co -products)  and that switching 
production to/from other products would not be easy.78 The market investigation 
was inconclusive on the question of whether the relevant market should be further 
segmented.79 
 
(121)  In conclusion , the Commission considers t hat, f or the purpose of th is Decision , 
the exact scope of the product market definition for the supply of DIB can be left 
open, since the Transaction does not raise  serious doubts as to its compatibility 
with the inter nal market, regardless of the product market definition.  
 
                                                 
77  Replies to question 5 of Q10 – questionnaire to customers of diisobutylene.  
78  Replies to questions 6 and 7 of Q5 – questionnaire to producers of diisobutylene.  
79  Replies to question 8 of Q5 – questionnaire to producers of diisobutylene and replies to question 6 of Q10 – questionnaire to 
customers of diisobutylene.  
 
 
 
27 (122)  With respect to the geographic market definition, while the Notifying Party 
ultimately believes that the precise scope of the market can be left open, it 
considers the geographic market to be regional , since transportation is generally  
not commercially viable and producers supply a large proportion of their volumes 
in the region in which their production site is located .  
 
(123)  The market investigation provided evidence that the market is likely to be 
regional in scope. Customers responding to the market investigation explained 
that contracts are typically concluded on a regional basis  and that transportation 
costs account for a significant portion of the sale price of DIB .80 However, the 
market investigation also provided evidence pointing to ward the existence of a 
global market: suppliers  consider that t here are no technical characteristics that 
impede DIB to travel long distances81 and customers indicated that,  should the 
price of the product in the EEA be subject to a small but permanent inc rease in 
price, in the order of 5 -10%, they would consider purchasing the products 
concerned from suppliers located outside the EEA.82  
 
(124)  In conclusion , the Commission considers that, for the purposes of the present 
case, the exact scope of the geographic  market definition for the supply of DIB 
can be left open, since no serious doubts as to the compatibility of the Transaction 
with the inter nal market arise, regardless of the geographic scope of the market 
concerned.  
 
4.5.2.  PTOP  (downstream product)  
 
(125)  PTOP  is a chemical intermediate mainly used in the downstream production of 
UV stabilizers . PTOP belongs to the chemical group of alkylphenols and is 
manufactured by reacting DIB with phenol.  
(126)  The Commission has not previously analysed the market for PTOP .  
 
(127)  With res pect to the product market definition, t he Notifying Party considers that 
the question of whether PTOP  represents a product market on its own or whether 
other products should be considered as belonging to the product market  can be 
left open . The market investigation indicated that the product does not have close 
substitutes for its downstream applications but was inconclusive on the question 
of whether  the relevant market should be further segmented .83 
 
(128)  In conclusion , the Commission considers t hat, f or the purpose of the present case, 
the exact scope of the product market definition for the supply of PTOP can be 
                                                 
80  Replies to qu estions 9 and 11 of Q10 – questionnaire to customers of diisobutylene.  
81  Replies to question 11 of Q5 – questionnaire to producers of diisobutylene.  
82  Replies to question 10 of Q10 – questionnaire to customers of diisobutylene.  
83  Replies to questions 23 and 24 of Q10 – questionnaire to customers of diisobutylene.  
 
 
 
28 left open, since the Transaction does not raise  serious doubts as to its 
compatibility with the inter nal market, regardless of the prod uct market 
definition.  
 
(129)  With respect to the geographic market definition, while the Notifying Party 
considers the geographic market to be global , since the product is easily 
transportable and  transport costs and import duties into the EEA are low . The 
results of the market investigation did not provide any evidence indicating that the 
market should be defined at a narrower level.  
 
(130)  In conclusion , the Commission considers that, for the purposes of the present 
case, the exact scope of the geographic  market definition for the supply of PTOP 
can be left open, since no serious doubts as to the compatibility of the Transaction 
with the inter nal market arise, regardless of the geographic scope of the market 
concerned.  
 
4.5.3.  Competitive assessment  
   
(131)  The Notifying Party submits that input foreclosure concerns should be dismissed 
in view of the multiple other source of supply for DIB available on the market . 
Similarly, the Notifying Party argues that customer foreclosure concerns should 
be dismissed given that SIG is not a critical path for DIB customers to reach the 
market place and that SK Capital's joint control over TPC Group precludes any 
foreclosure strategy.  
 
(132)  On the upstream market  for DIB , TPC Group estimates its market share to be 
below 30% ( both in volume and in value) at worldwide level in 2017; TPC Group 
does not supply DIB in the EEA. On the downstream market  for PTOP, SI Group 
estimates its global shares to be [40-50]%  in 2017. Its EEA share  is minimal ( less 
than [0-5]%).84  
 
(133)  Based  on the information made available to it, t he Commission considers that the 
Transaction will not result in either input or customer foreclosure for the 
following reasons.  
 
(134)  The Commission takes the view that based on the limited activities of TPC Group 
worldwide  on the upstream market for DIB and the presence of a  number of 
alternative suppliers such as Ineos, LyondellBasell , Itamitsu or Maruzen, it is 
unlikely that the merged entity will have the ability to engage in input foreclosure  
strategies post-Transaction . This is further substantiated by the fact that, 
                                                 
84  The Notifying Party submits that the market shares of TPC Group on the DIB market and SI Group's market share on the PTOP 
market did not substantially differ in the past three years. Market  shares in value would not substantially differ from market 
shares in volume.  
 
 
 
29 according to one respondent to the market investigation, the supply of DIB is 
currently exceeding demand.85 
 
(135)  With respect to customer foreclosure, suppliers of DIB raised the risk that SI 
Group could start pur chasing the entirety of its needs from TPC Group. One 
respondent also pointed out that TPC Group could increase its production 
capacity of DIB in order to meet the needs of SI Group, which would impact the 
sales of competing DIB's suppliers. However, the C ommission considers  that it is 
unlikely that the Transaction will result in customer foreclosure  given that  PTOP 
is only one of many applications for DIB , which means that suppliers of DIB will 
have a large array of customers to turn to  globally : not only other PTOP 
producers , but also producers of phenolic resins.86 In this respect, the Notifying  
Party submitted that SI Group’s total purchases of DIB  represent just [20-30]%  of 
the total demand for DIB, amount of purchases which,  in any event, significantly 
exceed  the value of TPC Group 's total production of DIB.87  
 
(136)  Furthermore, since TPC Group sells the entirety of its production of DIB 
(including to SI Group) outside the EEA and that SI Group had marginal sales of 
PTOP in the EEA in 20 17 with a market share  of less than [0-5]%, the 
Transaction is unlikely to result in significant anticompetitive effects  in the EEA . 
 
(137)  In light of the above considerations, the Commission concludes that the 
Transaction does not raise serious doubts as to its compatibility with the internal 
market with respect to the vertical relationship between TPC Group 's supply of 
DIB (upstream) and SI Group's production of PTOP  (downstream) under any of 
the alter native market definitions . 
 
4.6. Butene -1 as an input material for the production of OSBP and DSBP  
 
4.6.1.  Butene -1 (downstream product)  
 
(138)  Butene -1 is a derivative of butylene used in a number of end -uses including 
polyethylene and chemical intermediates for antioxidants. It is a derivative of 
butylene, four -carbon mono -olefins that are produced in various hydrocarbon 
processes. The Commission has not previously analysed the mark et for Butene -1.  
 
(139)  With respect to the product market definition, while the Notifying Party explains 
that Butene -1 is broadly substitutable with other chemical products such as 
                                                 
85  Replies to question 18 of Q5 – questionnaire to producers of diisobutylene.  
86  It should be noted that SI Group is also active in the production of phenolic resins, which als o use DIB as an input material for 
their production. However, since SI Group’s total purchases of DIB represent just around […] of total demand in the upstream 
market, it can reasonably be assumed that risks of customers' foreclosure are unlikely to arise.  
87  Form CO, para. 215.  In addition , the Notifying Party notes that expansion of capacity would require significant investments in 
terms of time and costs. The Notifying Party also submits that  TPC Group […].  
 
 
 
30 hexene and octane , it ultimately considers that the market can be defined at th e 
product level for Butene -1, without the need for any further segmentation .88 
 
(140)  The results of the market investigation were inclusive, but provided some 
evidence that Butene -1 may be  manufactured with the same technology and 
equipment as other chemical products  belonging to family of butylene ; therefore, 
a certain degree of supply -side substitutability may exist .89  
 
(141)  In conclusion , the Commission considers that, f or the purpose of the present case, 
the exact scope of the product market definition for the supply of Butene -1 can be 
left open, since the Transaction does not raise  serious doubts as to its 
compatibility with the inter nal market, regardless of the product market 
definition.  
 
(142)  The Parties consider the geographic market for Butene -1 to be regional, since 
transportation  over long distances  is generally not commercially viable and 
producers supply a large proportion of their volumes in the regions in which their 
production site is loc ated.  
 
(143)  The results of the market investigation indicate d that the Butene -1 is generally 
sold within the same region as where the manufacturer's production site is 
located. According to the respondents, the transportation  costs of Butene -1 over 
long distanc es are significant, which  limits trade across continents .90 
 
(144)  In conclusion , the Commission considers that, for the purposes of the present 
case, the exact scope of the geographic  market definition for the supply of 
Butene -1 can be left open, since no serious doubts as to the compatibility of the 
Transaction with the inter nal market arise, regardless of the geographic scope of 
the market concerned.  
 
4.6.2.  OSBP and DSBP (downstream products)  
 
(145)  The Commission has defined the market for OSBP  in Section 4.4.1 . 
 
(146)  DSBP is a raw material belonging  to the chemical group of alkylphenols that is 
manufactured by reacting Butene -1 with phenol. According to the Notifying 
Party's best knowledge, SI Group is the only producer of DSBP worldwide.  
 
                                                 
88  Form CO, para. 232. The Notifying Party considers that while butene -1 is offered in slightly different purity grades, all suppliers 
offer these purity grades and so a narrower segmentation of the market is not necessary.  
89  Replies to questions 6 and 7 of Q4 – questionnaire to producers of Buten e-1. 
90  Replies to questions 11 and 12 of Q4 – questionnaire to producers of Butene -1. One respondent indicated that: "Butene -1 is a 
liquefied gas that has to be transported in pressurized (and partly cooled) vessels. Deep sea transport is expensive and li mits 
trade between the continents".  
 
 
 
31 (147)  The Commission has not previously analysed the market for DSBP.  
 
(148)  With respect to the product market definition, the Notifying Party considers that 
while DSBP belongs to the broader chemical group of alkyphenols, the market 
can be considered at the product  level for DSBP. The Notifying Party further 
argues that it would not be appropriate to segment DSBP  either based on grade or 
other criteria  
 
(149)  In conclusion , for the purpose of the present case, the precise product market 
definition for DSBP can be left open, since the transaction does not raise serious 
doubts as to its compatibility with the internal market, regardless of the exact 
product market definition.  
 
(150)  With respect to the geographic market definition, while the Notifying Party 
considers  that the e xact geographic  market definition can ultimately be left open , 
it considers the market  to be global, since the product is easily transportable, and 
transport costs and import duties into the EEA are low.  
 
(151)  In conclusion , the Commission considers that, for t he purposes of the present 
case, the exact scope of the geographic  market definition for the supply of DSBP 
can be left open, since no serious doubts as to the compatibility of the Transaction 
with the inter nal market arise, regardless of the geographic sc ope of the market 
concerned.  
 
4.6.3.  Competitive assessment  
 
(152)  The Notifying Party submits that input foreclosure concerns should be dismissed 
in view of the number of alternative suppliers will remain active on the market 
post-Transaction. Similarly, the Notifying Party argues that customer foreclosure 
concerns should  be dismissed given that SI Group represents only a minor share 
of the total demand for Butene -1.  
 
(153)  On the upstream market  for Butene -1, TPC Group's has no activities in the EEA 
and estimates its market share at global level to be below 30%  (both in volume  
and value) .91  
 
(154)  On the  downstream markets , SI Group holds a market share of [40-50]%  in 
volume and [40-50]%  in value on the global market for OSBP92 and estimates its 
market share in the EEA to be around [90-100]% . To the best of its knowledge, SI 
Group is the only supplier of DSBP worldwide (and therefore in the EEA).  
                                                 
91  The Notifying Party submits that the market shares of TPC Group on the market f or Butene -1 did not substantially differ in the 
past three years.  
92  As already explained , the market investigation however revealed th at SI Group's market share worldwide is likely to be 
underestimated, fact that will be taken into account in the Commission's competitive assessment.  
 
 
 
32 (155)  The Commission takes the view that based on the limited activities of TPC Group 
on the upstream market for Butene -1 at worldwide level (and absence in the EEA) 
and the presence of a  number of alternative suppliers such as Evonik, Shell, 
Chevron Phillips Chemical or Versalis ,93 the merged entity will not have the 
ability to engage in input foreclosure  strategies post -Transaction . Moreover, given 
the minimal nature of SI Group's purchases of Butene -1 compared to TPC  
Group 's total Butene -1 sales94 it would be hardly profitable  for SI Group to 
discontinue the supplies of its other customers as SI Group  would in any event not 
be able to absorb all of TPC Group's production of Butene -1. The market 
investigation did not reveal any competition concerns with regard to input 
foreclosure .95 
 
(156)  Furthermore, the Commission considers that it is unlikely that the Transaction 
will result in customer foreclosure  given that a variety of alternative customers for 
Butene -1 will remain active on the market, representing an adequate customer 
base for upstream suppliers. Indeed, since SI Group 's purchases of Butene -1 
represent only around […] of TPC Group's total Butene -1 sales (in value) and 
around [0-5]% of total Butene -1's demand (globally), risks of customer 
foreclosure are unlikely to arise. Suppliers responding to the market investigation 
did not raise concerns in relation to the Transaction.96 
  
(157)  In light of the above considerations, the Commission concludes that the 
Transaction does not raise serious doubts as to its compatibility with the internal 
market with respect to the vertical relationship between TPC Group's supply of 
Butene -1 (upstream) and SI Group's production of OSBP and DSBP 
(downstream) u nder any of the alternative market definitions.  
 
4.7. HPIB as an input material for the production of several chemical 
intermediates  
 
(158)  The Transaction gives rise to a vertical overlap between TPC Group’s upstream 
supply of HPIB and Addivant’s downstream production of PTBP , 2,6 DTBP, 2,4 
DTBP, 6 -BOC  and phenolic resins.  
 
4.7.1.  HPIB (upstream)  
 
(159)  HPIB (Chemical name: High Purity Isobutylene) is an olefinic hydrocarbon 
produced by dehydration of tert -butanol.  It is one  type of isobutylene used in the 
                                                 
93  Form CO, para. 238 and replies to question 15 of Q4 – questionnaire to producers of Butene -1. 
94  SI Group's purchases of Butene -1 represent only around […] of TPC Group's total Butene -1 sales (in value) and around [0-5]% 
of total Butene -1 demand (globally).  
95  Replies to question 15 of Q4 – questionnaire to producers of Butene -1. 
96  Replies to questions 17 and 18 of Q4 – questionnaire to producers of Butene -1. 
 
 
 
33 production of a  number of chemical intermediates. The Commission has not 
previously  analysed the market for HPIB .  
 
(160)  With respect to the product market definition, t he Notifying Party explain s that, 
while HPIB belongs to the broader chemical group of i sobutylene , on a 
conservative basis, the relevant product market can be defined at the product 
level.  
 
(161)  The results of the market investigation indicated  that there is limited demand -side 
substitutability since customers of HPIB cannot replace this product with any 
other material for the production of its downstream application s.97 Suppliers also 
explained that HPIB is manufactured with the use of dedicated equipment and 
switching production to/from other products would not be easy .98 The market 
investigation did not pr ovide evidence that the relevant market should be further 
segmented.  
 
(162)  In conclusion , the Commission considers that, for the purpose of the present case, 
the exact scope of the product market definition for the supply of HPIB  can be 
left open, since the Tra nsaction does not raise  serious doubts as to its 
compatibility with the inter nal market , regardless of the product market 
definition.  
 
(163)  With respect to the geographic market definition, t he Notifying Party claims that 
the relevant geographic  market can be defined regional in scope since long -
distance transportation  of the product concerned is generally not commercially 
viable  and producers supply a large proportion of their volumes in the region 
where their production sites are located . 
 
(164)  The market inves tigation provided evidence that the market is likely to be 
regional in scope. Customers responding to the market investigation explained 
that there are technical barriers that prevent HPIB to travel outside the EEA  and 
that contracts are typically conclude d on a regional basis .99 This was confirmed 
by competitors as well.100  
 
(165)  In conclusion , the Commission considers that, for the purposes of the present 
case, the exact scope of the geographic  market definition for the supply of HPIB  
can be left open, since no serious doubts as to the compatibility of the Transaction 
with the inter nal market arise, regardless of the geographic scope of the market 
concerned.  
 
                                                 
97  Replies to question 5 of Q8 – questionnaire to customers of high purity isobutylene.  
98  Replies to questions 6 and 7 of Q9 – questionnaire to producers of high purity isobut ylene.  
99  Replies to questions 8 and 11 of Q8 – questionnaire to customers of high purity isobutylene.  
100  Replies to  questions 9 and 11 of Q9 – questionnaire to producers of high purity isobutylene.  
 
 
 
34 4.7.2.  Chemical intermediates (downstream)  
 
(166)  In relation to the downstream applications of HPIB, the markets for 2,6 DTBP, 
2,4 DTBP and 6 -BOC have been discussed in Section s 4.2 and 4.3 . In addition : (i) 
PTBP is a chemical intermediate that  belongs to the group of alkylphenols and is 
manufactured by reacting phenol with  HPIB ; (ii) phenolic resins are synthetic 
polymers that are used as heat -resistant  binders in a wide variety of applications, 
including special resins.  
 
(167)  With respect to the product market definition, t he Notifying Party claims that the 
relevant product market s can be defined at the product level.  In particular, in 
relation to phenolic resins, the Notifying Party submits that no further 
segmentation based either o n grade or other criteria would  be appropriate.  
 
(168)  The results of the market investigation in relation to 2,6 DTBP, 2,4 DTBP and 6 -
BOC  have  been discussed in Sections 4.2 and 4.3 . As regards PTBP, the market 
investigation provided some evidence that it can hardly be replaced by other 
products and that suppliers use dedicated equipment for the manufacturing of this 
chemical , while being able to supply different grades with the same production 
equipment .101 As regards phenolic resins, the results of market investigation were 
inconclusive .102 
 
(169)  In conclusion , the Commission considers that, f or the purpose of the present case, 
the exact scope of the p roduct market definition s for the supply of 2,6 DTBP, 2,4 
DTBP, 6-BOC , PTBP and phenolic resins  can be left open, since no serious 
doubts as to the compatibility of the Transaction with the inter nal market arise , 
regardless of the production  market definit ions. 
 
(170)  With respect to the geographic  market definition, the Notifying Parties' views in 
relation to 2,6 DTBP, 2,4 DTBP and 6 -BOC  have been discussed in Sections 4.2 
and 4.3 . In relation to PTBP and phenolic resins, the Notifying Party argues that 
the relevant markets are at least EEA -wide and possibly global, since the products 
are easily transportable, and transport costs and import duties are low .  
 
(171)  The results of the market investigation in relation to 2,6 DTBP, 2,4 DTBP and 6 -
BOC  have been discussed in Sections 4.2 and 4.3 . As regards PTBP, the results of 
the market inves tigation were in line with the Notifying Parties' views .103 As 
regards phenolic resins, the results of market investigation were inconclusive.104 
 
                                                 
101  Replies to question 25 of Q8 – questionnaire to cus tomers of high purity isobutylene.  
102  Replies to question 39 of Q8 – questionnaire to customers of high purity isobutylene.  
103  Replies to questions 29 to 34 of Q8 – questionnaire to customers of high purity isobutylene.  
104  Replies to questions 43 to 48 o f Q8 – questionnaire to customers of high purity isobutylene.  
 
 
 
35 (172)  In conclusion , the Commission considers that, for the purposes of the present 
case, the exact scope of the geographic  market definition can be left open, since 
no serious doubts as to the compatibility of the Transaction with the inter nal 
market arise, regardless of the geog raphic scope of the market concerned.  
 
4.7.3.  Competitive assessment  
 
(173)  On the upstream HPIB market, TPC Group holds a market share (in volume and 
in value) well below 30% both in the EEA (below [0-5]%) and globally.105  
 
(174)  On the downstream markets where SI Group is active :  
 
a) 2,4 DTBP – SI Group has a market share of [70-80]%  in the EEA and of 
[30-40]% globally (in volume and value);  
b) 2,6 DTBP – SI Group has a market share of [50-60]%  in the EEA (in 
volume and value) and of [30-40]%  (in value) / [40-50]%  (in volume) 
globally;  
c) 6-BOC – SI Group has a market share of [40-50]%  globally (in volume 
and value ). No sales occurred in the EEA in the period 2015 -2017.  
d) PTBP – SI Group has a market share of [30-40]%  in the EEA and [40-
50]%  globally (in volume and value)106; 
e) Phenolic resins – SI Group has a market share of less than 30% both in the 
EEA and globally (in volume and value)107. 
 
(175)  In the upstream market  for the supply of HPIB, where the TPC Group' market 
share is below 30%, irrespective of the geographic scope of the market, a number 
of alternative suppliers such as LyondellBasell, Evonik Industries and Enterprise 
Products will remain on the market108, exe rting competitive pressure on the 
combined entity. Therefore, it is unlikely that the Transaction will lead to input 
foreclosure risks.  
 
(176)  Moreover, the Commission notes that, based on the information submitted by the 
Parties, the applications for which SI G roup purchases HPIB (namely, 2,6 DTBP, 
2,4 DTBP, PTBP, 6 -BOC  and phenolic resins ) account for [30-40]%  of the total 
demand for HPIB, which means that suppliers of HPIB have a large array of 
                                                 
105  The Notifying Party submits that the market shares of TPC Group on the market for HPIB  did not substantially differ in the past 
three years.  
106  The Notifying Party submits that the market shares of S I Group on the market for PTBP did not substantially differ in the past 
three years.  
107 The Notifying Party submits that the market shares of S I Group on the market for phenolic resins  did not substantially differ in 
the past three years.  
108  Replies to question 16 of Q8 – questionnaire to customers of high purity isobutylene.  
 
 
 
36 customers to turn to. This is further substantiated by the fact th at SI Group’s 
purchases represent only [0-5]% of the total demand for HPIB.  Therefore, it is 
unlikely that the Transaction will lead to customer foreclosure risks.  
 
(177)  Overall, customers responding to the market investigation did not raise concerns  
in relatio n to the proposed Transaction.109 Competitors also confirmed they would 
generally be able to find alternative customers to SI Group, especially in the 
EEA.110  
 
(178)  In light of the above considerations,  the Commission con cludes  that the 
Transaction does not raise serious doubts as to its compatibility with the internal 
market with respect to the vertical relationship between TPC Group's supply of 
HPIB (upstream) and SI Group's production of 2,6 DTBP, 2,4 DTBP, 6 -BOC , 
PTBP , and phenolic resins  (downstream) under any plausible market definitions.  
 
4.8. Conclusion on vertical effects  
 
(179)  For the reasons set out in Sections 4.2 to 4.7 , the Commission concludes that the 
Transaction does not raise serious doubts as to its compatibility with t he internal 
market due to vertical effects.  
 
5. CONCLUSION  
 
(180)  For the above reasons, the Commission has decided not to oppose the notified 
operation and to declare it compatible with the internal  market and with the EEA 
Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement . 
 
 
For the Commission  
 
(Signed ) 
Margrethe VESTAGER  
Member of the Commission  
 
                                                 
109  Replies to question 22 of Q8 – questionnaire to customers of high purity isobutylene.  
110  Replies to question 15 of Q9 – questionnaire to producers of high purity isobuty lene.