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 -MERGER -REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels,  6.12.2021  
C(2021 ) 9065 final  
PUBLIC VERSION  
 
PTT Global Chemical Public Company 
Limited  
555/1 Energy Complex,  
Building A, 14th-18th Floor,  
Vibhavadi Rangsit Road, Chatuchak  
10900 Bangkok  
Thailand  
Subject : Case M.10432 – PTTGC / Allnex  
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 29 October 2021 , the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which PTT Global 
Chemical Public Company Limited (“PTTGC” or the “Notifying Party”, Thailand) 
intends to acquire within the meanin g of Article 3(1)(b) of the Merger Regulation 
                                                 
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 (the “TFEU”) has in troduced 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”).  
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information omitted has been replaced by 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.  




 
 
6 4.1.1.1.  Relevant product market s 
(10) The Commission has previously considered a segmentation of the relevant product 
market for the supply o f coating resins by (i) delivery technology, (ii) chemistry and 
(iii) industrial application.6 
(a) Delivery technology.  A segmentation by delivery technology distinguishes 
between the following categories of coating resins: (i) liquid resins that can 
be furthe r segmented into solvent borne and waterborne resins, (ii) radiation 
curable resins (“radcure”) and (iii) powder resins. The Commission 
considered that liquid, radcure and powder resins differ from one another in 
terms of production process, the way they a re applied to the substrate, the 
curing time, the residue they leave behind and their environmental 
friendliness and are not substitutable with one another and constitute separate 
markets.  
(b) Chemistry. A segmentation by chemistry distinguishes coating resins  by 
reference to the base chemical compound of the resin. Common chemistries 
of coating resins include acrylics, alkyds, epoxies, polyurethanes and 
polyesters or hybrids thereof, comprising two or more such chemistries. 
Different base chemicals impart diff erent performance characteristics to the 
coating, and the chemistry that a resin manufacturer and its customers choose 
is generally driven by the requirements of the coating’s intended industrial 
application.  
(c) Industrial application.  By reference to the in dustrial application, the 
Commission has previously considered segmenting coating resins into: (i) 
Automotive OEM; (ii) Automotive refinish; (iii) Industrial Wood; (iv) Coil 
and pre -coated metals; (v) Other Industrial uses; (vi) Marine; (vii) Special 
Purpo se; (viii) Packaging; (ix) Architectural; and (x) Adjacent coating and 
non-coating applications While considering it appropriate to segment the 
market for coating applications by industrial applications as well, the 
Commission left the market open.  
(11) The No tifying Party agrees with the Commission’s decisional practice concerning a 
market segmentation of the coating resins market by delivery technology and by 
chemistry but submits that a segmentation by industrial application is not relevant, 
mainly because t he nexus of the case lies on vertical relationships. According to the 
Notifying Party,  a specific resin (segmented by  delivery method and chemistry)  uses 
the same inputs regardless of its ultimate industrial use.7 The Commission’s market 
investigation did not give any grounds to depart  from the Commission’s recent 
decisional practice in this respect.  
(12) For the purposes of this Decision, it is not necessary to further explore a narrower 
product market by industrial application, as  the focus of the competitive assessment 
is potential customer foreclosure  and Allnex’s shares of demand are already minimal 
considering the current broader product markets downstream (see Table 4 to Table 6 
below).  Under such a  potential narrower product market,  for which the input 
                                                 
6  Case M.10006 – Covestro / Koninklijke DSM (Resins & Functional Materials Business and Other 
Assets), paragraph 13.  
7  Form CO, paragraphs 243 -246. 
 
 
7 products would be the same,  the same arguments would apply and the possibility of 
customer foreclosure would be even  more remote.  The issue of a potential 
segmentation of coating resins by industrial application can therefore be left open.  
(13) Therefore, based on the Commission’s previous decisions , its market investigation, 
and the Notifying Party’s argument s, the Commissi on considers that for the purpose 
of this Decision separate coating resins markets exist segmented by delivery 
technology and chemistry. The vertically affected product markets within coating 
resins are therefore (i) radcure waterborne ultra -violet polyure thane dispersion  
(“UV PUD”) and (ii) polyester powders . 
4.1.1.2.  Relevant geographic market  
(14) The Commission has previously considered that the appropriate geographic market 
for coating resins i s either EEA -wide or worldwide.8 In line with the Commission’s 
previous decisional practice, the Notifying Party considers that the appropriate 
geographic scope is likely worldwide and at least EEA -wide.9 The Commission’s 
market investigation did not give any grounds to depart  from the C ommission’s 
recent decisional practice, and f or the purpose of the current decision, it can be left 
open whether the appropriate geographic scope is worldwide or EEA -wide, as the 
Transaction does not give rise to serious doubts under either geographic scop e. 
4.1.2.  Crosslinkers  
(15) Crosslinkers are hardeners that are frequently used in coating formulations to create 
bonds between the resin molecule chains to solidify a coating and enhance its 
performance. Crosslinkers are mixed with coating resins and other coating 
components in a coating formulation. After application of the coating and 
evaporation of the solvent, the cross -linking reaction takes place at ambient or 
increased temperature.  
4.1.2.1.  Relevant product markets  
(16) The Commission has previously identified two types of c rosslinkers on the basis of 
chemistry: (i) crosslinkers amino resins, and (ii) crosslinkers phenolic resins. 
Regarding crosslinkers phenolic resins, a further distinction has been made between 
liquid phenolics (resols) and solid phenolics (novolacs).  The C ommission has also 
assessed separate markets for polyisocyanate crosslinkers produced on the basis of 
hexamethylene diisocyanate (“HDI”), namely aziridines crosslinkers and 
carbodiimide crosslinkers. 10 
(17) For crosslinkers amino resins and crosslinkers phenolic resins, the Commission has 
previously considered a further possible segmentation distinguishing between the 
same industrial applications as for coating resins.11 The Commission’s market 
                                                 
8  Case M.10006 – Covestro / Koninklijke DSM (Resins & Functional Materials Business and  Other 
Assets), paragraph 23.  
9  Form CO, paragraph 247.  
10  Case M.10006 – Covestro / Koninklijke DSM (Resins & Functional Materials Business and Other 
Assets), paragraph 26.  
11  Case M.10006 – Covestro / Koninklijke DSM (Resins & Functional Materials Business and Other 
Assets), paragraph 27.  
 
 
8 investigation did not give any grounds to depart  from the Comm ission’s recent 
decisional practice in this respect.  
(18) The Notifying Party agrees with the Commission’s decisional practice concerning a 
market segmentation of crosslinkers into the markets set out above,  but submits that 
a segmentation by industrial applica tion is not relevant .12 
(19) For the purpose of this Decision , it is not necessary to further explore narrower 
product markets by industrial application, as the focus of the competitive assessment 
is potential customer foreclosure and Allnex’s shares of demand a re already minimal 
considering the current broader product markets downstream (see Table 4 to Table 6 
below). Under such  a potential narrower product market, for which the input 
products would be the same, the same arguments would apply and the possibility of 
customer foreclosure would be even  more remote. The issue of a potential 
segmentation of crosslinkers by industrial application can therefore be left open.  
(20) Therefore, based on the Commission’s previous decisions , its market investigation 
and the Notifying Party’s arguments, the Commission considers that for the purpose 
of this Decision separate crosslinkers exist segmented by delivery technology and 
chemistry. The only vertically affected market within crosslinkers is thus 
crosslinker s amino resins . 
4.1.2.2.  Relevant geographic market  
(21) The Commission  has previously considered that the appropriate geographic market 
for crosslinkers amino resins is either EEA -wide or worldwide.13 The Notifying 
Party does not express a view on the appropriate geographic scope. The 
Commission’s market investigation did not  give any grounds to depart  from the 
Commission’s decisional practice, and f or the purpose of the current decision, it can 
be left open whether the appropriate geographic scope is worldwide or EEA -wide, as 
the Transaction does not give rise to serious doubts under either geographic scope.  
4.2. Upstream markets  
4.2.1.  Diisoc yanates  
(22) The primary use of diisocyanates is for the production of polyurethanes. There are 
aromatic isocyanates (made from benzene or toluene) and aliphatic isocyanates 
(based on saturated carbon ). Aromatic diisocyanates are mainly used for the 
production of foams. Aliphatic diisocyanates are mainly used for coatings 
applications (due to their superior light stability).  
                                                 
12  Form CO, paragraph 280. The Notifying Party submits that considering a segmentation by industrial 
application, may lead to affected downstream markets within solvent borne acrylics and alkyds/polyesters 
for auto motive refinish applications, where Allnex’s market share may be just above 30%. However, this 
would not change the Commission’s assessment as the resulting downstream markets would be so small 
that they do not make up a material fraction of demand for ups tream inputs. Furthermore, the 
Commission’s competitive assessment conservatively considers Allnex’s total demand for upstream inputs 
across all products (including non -affected ones) to exclude customer foreclosure even on that basis.  
13  Case M.10006 – Covestro / Koninklijke DSM (Resins & Functional Materials Business and Other 
Assets), paragraph 35.  
 
 
9 4.2.1.1.  Relevant product markets  
(23) In a recent decision concerning coating resins, t he C ommission considered that there 
are separate markets for the following types of diisocyanates:14 
(a) Hexamethylene diisocy anate (“HDI”);  
(b) Isophorone diisocy anate (“IPDI”);  
(c) 4,4′-Dicyclohexylmethane diisocyanate (“H 12MDI”);  
(d) Toluene diisocyanate (“TDI”);  
(e) Methylene diphenyl diisocyanate (“MDI”); and  
(f) Monomeric MDI (“mMDI”).  
(24) The Commission additionally considered that HDI derivatives constitute a separate 
market from HDI.15 
(25) The Notifying Party agrees with the Commission’s previous decisional practice 
concerning the rele vant product markets within diisocyanates.16 Additionally, the 
market investigation gave no grounds to depart  from the Commission’s recent 
decisional practice  discussed in paragraph (23). 
(26) Therefore, based on the Commission’s previous decisions , its market investigation 
and the  Notifying Party’s arguments, the Commission considers that for the purpose 
of this Decision separate diisocyanate markets exist a s set out in paragraph (23). The 
Transaction therefore gives rise to the following affected markets within 
diisocyanates: (i) HDI  and (ii) IPDI . 
4.2.1.2.  Relevant geographic market  
(27) The Commission has previously considered that the appropriate geographic market 
for HDI and IPDI is either EEA -wide or worldwide.17 The Notifying Party agrees 
with this assessment.18 The Commission’s market investigation did not gi ve any 
grounds to depart  from the Commission’s recent decisional practice, and f or the 
purpose of the current decision, it can be left open whether the appropriate 
geographic scope is worldwide or EEA -wide, as the Transaction does not give rise to 
serious doubts under either geographic scope.  
4.2.2.  Methyl methacrylate (“MMA”)  
(28) MMA is a commodity chemical product widely used in large amounts for the 
production of PMMA moulding  compounds (an intermediary product used in the 
                                                 
14  Case M.10006 – Covestro / Koninklijke DSM (Resins & Functional Materials Business and Other 
Assets), paragraph 41.  
15  Case M.8674 – BASF SE / Solvay S.A. , recital 367.  
16  Form CO, paragraph 93.  
17  Case M.10006 – Covestro / Koninklijke DSM (Resins & Functional Materials Business and Other 
Assets), paragraph 46.  
18  Form CO, paragraph 94.  
 
 
10 manufacture of acrylic products), acrylic products, impact modifiers, acrylic latexes, 
lacquers, enamels, and resins for use in specialty chemicals and coatings. Other 
important applications for MMA include emulsion polymers principally for paper, 
textiles, leather and floor polishes, mineral -filled sheet, polyesters, polymer concrete, 
and adhesives.  
4.2.2.1.  Relevant product markets  
(29) The Commission previously considered that MMA forms a separate product 
market.19 While the Commission ultimately left the matter open, it indicated that 
there was likely to be a  distinct product market for the supply of MMA  and MMA 
derivatives .20 PTTGC does not sell MMA derivatives.21 
(30) The Notifying Party agrees with the Commission’s assessment in its past decisions.22 
Additionally, the market investigation gave no grounds to depart  from the 
Commission’s decisional practice.  
(31) Therefore, based on the Commission’s previous decisions , its market investigation 
and the  Notifying Party’s arguments, the Commission considers that for the purpose 
of this Decision MMA and MMA derivatives consti tute separate product markets. 
The Transaction therefore gives rise to an affected market for MMA . In any event , 
as PTTGC does not sell MMA derivatives  and the Transaction does not raise serious 
doubts for the narrower market for MMA, the Commission’s asse ssment would also 
apply to the broader market . 
4.2.2.2.  Relevant geographic market  
(32) The Commission has previously considered that the appropriate geographic market 
for MMA is either EEA -wide or worldwide.23 The Notifying Party agrees with this 
assessment.24 The Commis sion’s market investigation did not give any grounds to 
depart  from the Commission’s decisional practice, and for the purpose of the current 
decision, it can be left open whether the appropriate geographic scope is worldwide 
or EEA -wide, as the Transaction  does not give rise to serious doubts under either 
geographic scope.  
4.2.3.  Styrene monomer  
(33) Styrene is an intermediate chemical product and has no end -use in itself. It is used as 
a base material in the production of polystyrene and as a co -monomer in the 
product ion of a number of polymers and synthetic rubbers, as well as in the 
manufacture of unsaturated polyester resins, gel coats and vinyl ester resins.  
                                                 
19  Case M.942 – Veba / Degussa, paragraph 14.  
20  Case M.9353 – Advent I nternational Corporation / Evonik Methacrylates Business Division, paragraphs 
16-29. 
21  Form CO, paragraph 186.  
22  Form CO, paragraph 186.  
23  Case M.9353 – Advent International Corporation / Evonik Methacrylates Business Division, paragraph 
41. 
24  Form CO,  paragraph 187.  
 
 
11 4.2.3.1.  Relevant product markets  
(34) The Commission has previously considered that styrene monomer constitutes a 
separat e relevant product market as there is no substitute for styrene in the 
manufacture of polystyrene and expanded polystyrene and other styrene 
derivatives.25 
(35) The Notifying Party agrees with the Commission’s assessment in its past decisions.26 
Additionally, the  market investigation gave no grounds to depart  from the 
Commission’s decisional practice.  
(36) Therefore, based on the Commission’s previous decisions , its market investigation 
and the  Notifying Party’s arguments, the Commission considers that for the purpose 
of this Decision styrene constitutes a product market without further segmentation. 
The Transaction therefore gives rise to an affected market for styrene . 
4.2.3.2.  Relevant geographic market  
(37) The Commission has previously considered that the appropriate geographic market 
for styrene is either EEA -wide or worldwide.27 The Notifying Party considers that 
the appropriate geographic scope for styrene is global, but submits that the 
appropriate geographic market definition can be left open between worldwide and 
EEA-wide as  the Transaction does not give rise to competitive concerns for either 
geographic scope .28 
(38) PTTGC does not have styrene sales in the EEA, and has a minimal market share (c. 
[0-5]%) globally.  
(39) The Commission’s market investigation did not give any grounds to depart  from the 
Commission’s decisional practice, and f or the purpose of the current decision, it can 
be left open whether the appropriate geographic scope is worldwide or EEA -wide, as 
the Transaction does not give rise to serious doubts under either geogr aphic scope.   
4.2.4.  Glycerol  
(40) Glycerol is a polyhydric alcohol which is derived from inputs such as tallow, palm 
oil, rape seed oil, soya bean oil or crude soap lye glycerine. Glycerol is used as raw 
material for various uses in the chemical industry  (among which  coating resins) , but 
most notably as moistening agent in over 1,500 applications (including personal 
care, pharmaceutical and coating resins).  
                                                 
25  M.9238 – Ineos Enterprises Holdings Limited / Ashland's Global Compound Resin Business and 
Manufacturing Facility in Marl, paragraphs 11 and 13.  
26  Form CO, paragraph 227.  
27  M.9238 – Ineos Enterprises Holdings Limited / Ashland's Global  Compound Resin Business and 
Manufacturing Facility in Marl, paragraph 12.  
28  Form CO, paragraphs 228 and 229.  
 
 
12 4.2.4.1.  Relevant product markets  
(41) In previous decisions, the Commission has left open whether all polyhydric alcohols 
are part of one and the same market or each polyhydric alcohol (such as glycerol) 
constitutes a separate product market.29 
(42) The Notifying Party submits that glycerol should be viewed as a single relevant 
product market given its distinct chemical structure and properties as well as the fact 
that plants are specifically designed to manufacture certain types of polyhydric 
alcohols.30 
(43) For the purpose of the current Decision, it can be left open whether the appropriate 
market definition is polyhydric alcohols, or whether a separate product market for 
glycerol is appropriate, as the Transaction does not give rise to serious doubts for 
either product market definition and PTTGC’s market share is similarly low for both 
product markets. Additionally, the market investigation gave no grounds to depart  
from the Commission’s decisional practice.  
(44) Therefore, based on the Commission’s previous deci sions , its market investigation 
and the  Notifying Party’s arguments, t he Commission will perform its competitive 
assessment  on the narrowest plausible basis, i.e. a separate market for glycerol . In 
any event , as the Transaction does not give rise to seriou s doubts for glycerol, the 
Commission’s competitive assessment would apply for a broader market for 
polyhydric alcohols as well, as PTT GC’s market share is similarly low, and Allnex’s 
share of demand would be even lower than for glycerol.  
4.2.4.2.  Relevant geograph ic market  
(45) The Commission has previously considered that the appropriate geographic market 
for glycerol is either EEA -wide or worldwide.31 The Notifying Party considers that 
the appropriate geographic scope for glycerol is likely global, but submits that the 
appropriate geographic market definition can be left open between worldwide and 
EEA-wide as the Transaction does not give rise to compe titive concerns for either 
geographic scope.32  
(46) The Commission’s market investigation did not give any grounds to depart  from the 
Commission’s decisional practice, and  for the purpose of the current decision, it can 
be left open whether the appropriate geog raphic scope is worldwide or EEA -wide, as 
the Transaction does not give rise to serious doubts under either geographic scope.  
4.2.5.  Purified terephthalic acid (“PTA”)  
(47) PTA is an organic compound in the form of fine white powder, principally used as a 
raw material  for the production of polyester products, such as polyethylene 
terephthalate (“PET”) -resin.  
                                                 
29  M.4957 – Perstorp Holding / Solvay Interox (caprolactones business), paragraph 16.  
30  Form CO, paragraph 233.  
31  M.4957 – Perstorp Holding / S olvay Interox (caprolactones business), paragraph 26.  
32  Form CO, paragraphs 234 and 235.  
 
 
13 4.2.5.1.  Relevant product  market s 
(48) In previous decisions, the Commission left open whether the relevant product market 
is the market for the production and supply of PTA, or  a broader market including 
the production and the supply of di -methyl terephthalate (“DMT”).33 PTTGC does 
not produce DMT34; therefore,  the matter is not relevant for the current Decision.  
(49) The Notifying Party agrees with the product market definition of the  Commission for 
PTA in past decisions.35 Additionally, the market investigation gave no grounds to 
depart  from the Commission’s decisional practice.  
(50) Therefore, based on the Commission’s previous decisions , its market investigation 
and the  Notifying Party’s arguments, the Commission will perform its competitive 
assessment on the narrowest plausible basis, i.e. a product market  for PTA . In any 
event , as PTTGC does not produce DMT , and the Transaction does not raise serious 
doubts for the narrower market for PTA, the Commission’s assessment would also 
apply to the broader market . 
4.2.5.2.  Relevant geographic market  
(51) The Commission has previously considered that the appropriate geographic market 
for PTA is either EEA -wide or worldwide.36 The Notifying Party agrees with th is 
assessment.37 The Commission’s market investigation did not give any grounds to 
depart  from the Commission’s decisional practice, and  for the purpose of the current 
decision, it can be left open whether the appropriate geographic scope is worldwide 
or EE A-wide, as the Transaction does not give rise to serious doubts under either 
geographic scope.  
4.2.6.  Ethylene glycols (mono -ethylene glycol (“MEG”) and di -ethylene glycol (“DEG”))  
(52) MEG and DEG are ethylene glycols, sometimes referred to as alcohols. Ethylene 
glycols are grouped depending on their chain length.  There are three main types of 
ethylene glycols: MEG, DEG and tri-ethylene glycol (“ TEG”). MEG accounts for 
the great majority of the production (about 90%), with the remaining part of 
production distributed between DEG (about 9%) and TEG (about 1%). The most 
important applications for MEG are in the production of polyester for 
textile/industrial fibres, polyester film for packaging/photography, polyester resin 
used to make plastic (PET) bottles, and anti -freeze. DEG is used in the production of 
polyols for use in polyurethanes for clothing, automotive and construction 
applications, while TEG is used as a dehumidifier in oil and gas processing and as 
automotive antifreeze/coolant.  
                                                 
33  Case M.7918 – Indorama Netherlands / Guadarranque Polyester, paragraph 22 and case M.1293 – 
BP/Amoco, paragraph 10.  
34  Form CO, paragraph 191.  
35  Form CO, paragraph 192.  
36  Case M.7918 – Indorama Netherlands / Guadarranque Polyester, paragraph 26 . 
37  Form CO, paragraph 193.  
 
 
14 4.2.6.1.  Relevant product markets  
(53) The C ommission has previously considered separate markets for MEG, DEG and 
TEG, but left open whether they constitute separate product markets or form part of 
a broader market of ethylene glycol.38 
(54) The Notifying Party submits that it can be left open whether the  appropriate market 
definition is ethylene glycol, or whether separate product markets for MEG and DEG 
are appropriate, as the Transaction does not raise competitive concerns for either 
product market definition and PTTGC’s market share is similarly low fo r all 
markets.39  
(55) All ethylene glycols, MEG, DEG and TEG, result from a single production process 
which yields roughly 90% MEG, 8 -9% DEG and 1% TEG. Therefore, any producer 
of ethylene glycols typically supplies all three products. The Transaction does not 
give rise to serious doubts even on the narrowest  basis of separate markets for each 
of MEG and DEG  (no affected links arise for TEG) . Therefore, for the purpose of 
the current Decision, it can be left open whether the appropriate market definition is 
ethylene glycol, or whether separate product markets for MEG and DEG are 
appropriate.  
(56) The Commission will perform its competitive analyses  on the narrowest basis, i.e. 
separate markets for MEG  and DEG . 
4.2.6.2.  Relevant geographic market  
(57) The Commission has previously considered that the appropriate geographic market 
for ethylene glycols (including MEG and DEG)  is either EEA -wide or worldwide.40 
The Notifying Party agrees with this assessment.41 The Commission’s market 
investigation did not give any grounds to depart  from the Commission’s decisional 
practice, and  for the purpose of the current decision, it can be left open whether the 
appropriate geographic scope is worldwide or EEA -wide, as the Transaction does 
not give rise to serious doubts under either geographic scope.  
4.2.7.  Aromatic solvents  
(58) Aromatic solvents include benzene, xylene, toluene and others. A solvent is a 
volatile organic compound that  allows application of the coating to the substrate and 
evaporates from the surface upon application.  
4.2.7.1.  Relevant product markets  
(59) In the area of aromatic solvents, the Commission has in the past left open whether 
xylene constitutes a separate market or should  be regarded as part of the overall 
market for gasoline additives.42 For toluene, another aromatic solvent, the 
Commission has considered , but left open , whether there is an overall market for 
                                                 
38  M.4094 – Ineos / BP Dormagen, paragraph 56.  
39  Form CO, paragraph 197.  
40  M.4094 – Ineos / BP Dormagen, paragraph 58.  
41  Form CO, paragraph 198.  
42  M.4426 – Sabic / Huntsman Petrochemicals UK, paragraph 30.  
 
 
15 toluene or separate markets for toluene depending on purity ( e.g. TDI-grade 
toluene).43 
(60) The Notifying Party considers that it is appropriate to consider separate product 
markets for each aromatic solvent ( e.g. xylene, toluene, benzene) without further 
segmentation.44 
(61) The market investigation did not give indication on whether xylene or a broader 
market for gasoline additives is more appropriate. Based on the  Commission’s 
previous decisions , its market investigation and the  Notifying Party’s arguments, the 
Commission co nsiders that , for the purpose of the current Decision, the appropriate 
product market definition can be left open between a market for xylene or a broader 
market for gasoline additives . The  Transaction does not give rise to serious doubts 
even for the narr ower product market of xyelene, for which a vertical link exists. 
PTT’s market share is similarly low for both  product market definitions, and under 
the broader product market definition of gasoline additives, Allnex’s share of 
demand would be even lower. Therefore, the Commission’s competitive assessment 
for xylene also applies to the broader product market for gasoline additives .  
(62) The Commission will perform its competitive assessment on the narrowest basis, i.e. 
xylene .45 
4.2.7.2.  Relevant geographic market  
(63) The Co mmission has previously considered that the appropriate geographic market 
for xylene is either EEA -wide or worldwide.46 The Notifying Party considers that the 
appropriate geographic scope for xylene is global, but submits that the appropriate 
geographic mar ket definition can be left open between worldwide and EEA -wide,  as 
the Transaction does not give rise to competitive concerns for either geographic 
scope.47  
(64) The Commission’s market investigation did not give any grounds to depart  from the 
Commission’s deci sional practice, and  for the purpose of the current decision, it can 
be left open whether the appropriate geographic scope is worldwide or EEA -wide, as 
the Transaction does not give rise to serious doubts under either geographic scope.  
                                                 
43  M.2389 – Shell / DEA, paragraph 165.  
44  Form CO, paragraph 220.  
45  The Transaction does not give rise to an affected market for toluene. Toluene is banned in a concentration 
equal to or higher than 0.1 % by mass in adhesives and spray paints intended for sale to the general public 
by Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 
concerning the Registration, Evaluation, Authorisati on and Restriction of Chemicals (REACH), annex 
XVII. In compliance with the EEA regulatory framework, PTTGC does not sell toluene in the EEA and 
has not done so in the past. From a demand -side perspective, in the EEA, Allnex as well as many of its 
competit ors replaced toluene with xylene (already used by Allnex to produce crosslinkers amino resins in 
other countries).  
46  M.2389 – Shell / DEA, paragraph 166.  
47  Form CO, paragraphs 222 and 223.  
 
 
16 5. COMPE TITIVE ASSE SSME NT 
(65) As set out in paragraph (6), PTTGC is active in the manufacture of various 
chemicals and basic feedstock for downstream industries. Allnex sources  some of 
these products for the production of synthetic resin products. The Transaction 
therefore gives rise to markets that are affected by virtue of the vertical links 
between PTTGC products upstream and Allnex’s products downstream. The 
Transaction does  not give rise to products that are horizontally affected, as PTTGC 
and Allnex are not active in the same product markets.  
5.1. Analytical framework  
(66) Article 2 of the Merger Regulation requires the Commission to examine whether 
notified concentrations are compat ible with the internal market, by assessing whether 
they would significantly impede effective competition in the internal market or in a 
substantial part of it, in particular as a result of the creation or strengthening of a 
dominant position.48 
(67) In the asse ssment of non -horizontal mergers, the Commission distinguishes between 
two broad types of such mergers: vertical mergers and conglomerate mergers.  
(68) Vertical mergers involve companies operating at different levels of the supply chain. 
For example, when a man ufacturer of a certain product (the “upstream firm ”) merges 
with one of its distributors (the “downstream firm ”), this is called a vertical merger.49 
(69) Conglomerate mergers are mergers between firms that are in a relationship that is 
neither horizontal (as co mpetitors in the same relevant market) nor vertical (as 
suppliers or customers). In practice, the Commission focusses on mergers between 
companies that are active in closely related markets (e.g. mergers involving suppliers 
of complementary products or pro ducts that belong to the same product range).50 The 
Transaction does not lead to markets where a conglomerate effects assessment is 
warranted.  
(70) In assessing potential vertical effects of a merger, the Commission analyses whether 
a merger results in foreclos ure so that actual or potential rivals' access to supplies or 
markets is hampered or eliminated as a result of the merger, thereby reducing these 
companies' ability and/or incentive to compete. Such foreclosure may discourage 
entry or expansion of rivals o r encourage their exit. Foreclosure thus can be found 
even if the foreclosed rivals are not forced to exit the market: it is sufficient that the 
rivals are disadvantaged and consequently led to compete less effectively. Such 
foreclosure is regarded as anti -competitive where the merging companies — and, 
possibly, some of its competitors as well — are as a result able to profitably increase 
the price charged to consumers.51 
(71) Two forms of foreclosure can be distinguished. The first is where the merger is 
likely to raise the costs of downstream rivals by restricting their access to an 
                                                 
48  Regarding rules relating to the functioning of the EEA Agreeme nt, see Annex XIV to the EEA 
Agreement.  
49  OJ C 265, 18.10.2008, p. 6 -25 (the ’Non -horizontal Merger Guidelines’), paragraph 4.  
50  Non-horizontal Merger Guidelines, paragraph 91.  
51  Non-horizontal Merger Guidelines, paragraph 29.  
 
 
17 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 foreclo sure).52 
(72) In assessing both types of foreclosure, the Commission assesses whether (i) the 
merged entity would have the ability to engage in foreclosure, (ii) it would have the 
incentive to do so, and (iii) what would be the overall impact on effective 
compet ition in the affected markets.53  
5.2. Affected markets  
(73) As illustrated above in Figure 1, the ten vertical relationships affected as a result of 
the Transaction are the following:  
(a) HDI upstream with radcure waterborne UV PUD  downstream;  
(b) IPDI  upstream with radcure waterborne UV PUD  downstream;  
(c) MMA  upstream with radcure waterborne UV PUD  downstream;  
(d) Styrene  upstream with radcure waterborne UV PUD  downstream;  
(e) Glycerol  upstream with radcure waterborne UV PUD  downstream;  
(f) Glycerol  upstream with polyester powders  downstream;  
(g) PTA upstream with polyester powders  downstream;  
(h) DEG  upstream with polyester powders  downstream;  
(i) MEG  upstream with polyester powders  downstream;  
(j) MEG  upstream with crosslinkers amino resins  downstream and  
(k) Xylene  upstream with crosslinkers amino resins  downstream.  
(74) All mar kets are vertically affected only by virtue of Allnex’s market share 
downstream, and not by PTTGC’s market share upstream, which always remains 
well under 30% as illustrated in the next section. The Commission’s investigation54 
has not yielded anything that  would indicate that PTTGC possesses market power. 
Therefore, the Commission considers that the Transaction does not create a risk of 
input foreclosure based on the market structure. In light of this , the Commission’s 
competitive analysis will focus on the  possibility of customer foreclosure.  
5.3. Market structure  
(75) PTTGC’s market shares in the affected upstream markets are provided below in 
Table 2. 
                                                 
52  Non-horizontal Merger Guidelines, paragraph 30.  
53  Non-horizontal Merger Guidelines, paragraphs 32 and 59.  
54  Responses to questionnaire Q1.  



 
 
21 products that sufficient alternative customers exist if Allnex’s demand disappear ed 
from the market.61 
(84) Furthermore, for all upstream products, the relevant downstream products only make 
up a small percentage of the total demand (with a maximum of [5-10]% for PTA 
demand  in the  EEA destined for polyester powder production), showing that all 
upstream products have various alternative downstream uses . Respondents to the 
Commission’s market investigation confirmed that the relevant downstream products 
only make up a small fraction of demand of the vertically related upstream products.  
For each affected upstream product, the majority of respondents indi cated that the 
downstream products affected by the Transaction only make up a small share 
(<10%) of upstream product demand.62 One respondent explains: “ Radcure 
waterborne UV PUDs are a small niche of what is still a niche coating technology. 
The upstream m aterials listed, on the other hand, are commodities or specialties of 
very large use in many industries. ”63 Similarly, for polyester powders and cross 
linker amino resins respectively, it explains: “ Polyester Powders are produced in 
much greater volumes tha t Radcure Waterborne UV PUD, but still can only account 
for a fraction of the total use of the listed commodities used in the production of PET 
and as biofuel component ” and “ As above. Amino crosslinkers are common, but not 
so much! ”64 
(85) This demonstrates tha t the downstream products in which Allnex is active are 
relatively niche uses of the upstream products, which are chemical commodities with 
uses over a large range of industries. Under these circumstances, it is implausible 
that the merged entity would hav e the ability to engage in a successful customer 
foreclosure strategy post -Transaction.   
(86) The facts of this case make it highly unlikely that the merged entity will have the 
ability to foreclose upstream competitors from access to downstream customers post-
Transaction.  
(87) In addition to this clear lack of ability, the Commission considers that the merged 
entity would have no incentive  to engage in customer foreclosure. Considering 
Allnex’s minimal share of demand for the upstream products, such customer 
foreclosure would not materially affect the ability of upstream  competitors to 
compete with the merged entity. In turn, this would not affect the cost of 
downstream rivals and thereby allow the merged entity to set higher prices 
downstream. The merged entity  therefore has nothing to gain from such a strategy.  
(88) Finally, even if customer foreclosure were to take place, the impact  on the markets 
of such strategy would be small in view of Allnex’s limited procurement volumes 
compared to the overall size of the mar ket. 
(89) In line with the above, the vast majority of respondents to the Commission’s market 
investigation did not indicate any concerns about the Transaction.  One respondent 
voiced the concern that the merged entity may turn to captive use for upstream 
                                                 
61  Responses to questionnaire Q1, question 9.  
62  Responses to questionnaire Q1, questions 5 -7. 
63  Response to questionnaire Q1, question 5.1.  
64  Response to questionnaire Q1, questions 6.1 and 7.1.  
 
 
22 produc ts HDI and IPDI. However, as set out in paragraphs (82) and (84), Allnex 
makes up a limited share of sale for each product (including HDI and IPDI), and the 
affected downstream products only comprises a small share of all downstream 
applications for each upstream product (including HDI and IPDI).65  
5.5. Conclusion  
(90) For the reasons set out above, the Transaction does not give rise to serious doubts as 
to its compatibility with the internal market or a substantial part thereof and the 
functioning of the EEA agreement in relation to vertical effects for any of the 
vertical links set out in paragraphs (73)(a) -(73)(k) . 
6. CONCLUSION  
(91) For the above reasons, the European Commission has decided not to oppose the 
notified concentration 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  
Executive Vice -President  
 
                                                 
65  Responses to questionnaire Q1, question 11