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,  27.2.2020  
C(2020 ) 1259 final  
PUBLIC VERSION  
 
Saudi Arabian Oil Company  
North Park 3, Building 3302  
P.O. Box 5000  
31311 Dhahran  
Saudi Arabia  
Subject : Case M.9410  - SAUDI ARAMCO/SABIC  
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 23 January 2020, the European Commission received notification of a 
concentration pursuant to Artic le 4 of the Merger Regulation, which would result 
from a proposed transaction by which Saudi Arabian Oil Company (together with 
the entities it directly or indirectly controls referred to as “Saudi Aramco”) intends to 
acquire the 70% shareholding in Saudi Basic Industries Corporation (together with 
the entities it directly or indirectly controls “SABIC”) currently held by the Public 
Investment Fund of Saudi Arabia (the “PIF”) (the “Transaction”). Through this 
acquisition of shares, Saudi Aramco would acquir e sole control over SABIC.3 (Saudi 
                                                 
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  “Communi ty” 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 35 , 03.02.2020 , p. 10. 
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information omitted has been replaced by 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.  
 
 
2 Aramco is designated hereinafter as the “Notifying Party” while Saudi Aramco and 
SABIC are designated hereinafter as the “Parties”.)  
1. THE  PARTIE S  
(2) Saudi Aramco is a listed joint stock company established in Saudi Arabia by virtue 
of Royal Decree. Saudi Aramco is listed on the Saudi Stock Exchange (Tadawul). 
Saudi Aramco is 98.5% owned by Saudi Arabia. The remaining 1.5% is publicly 
traded. Saudi Aramco is mainly active in the upstream petroleum value chain. Saudi 
Aramco expl ores, produces and markets crude oil (which represents approximately 
[…]% of its global turnover), as well as natural gas, LPG and fuels (which account 
for […]% of its global turnover). In addition, Saudi Aramco is active in the 
production and sale of chem icals, including basic chemicals such as aromatics, 
olefins, and polyolefins and more complex products such as polyols and advanced 
synthetic rubber.  
(3) SABIC is a listed joint stock company established in Saudi Arabia by virtue of 
Royal Decree SABIC is liste d on the Saudi Stock Exchange. SABIC is controlled by 
the PIF, which holds 70% of SABIC’s shares. The remaining shares (30%) are 
publicly traded.4 SABIC is primarily active in the downstream petroleum value 
chain. SABIC produces and sells commodity chemica ls (including petrochemicals), 
intermediates, polymers (also referred to as plastics), fertilizers and, to some extent, 
metals. SABIC does not produce or sell crude oil or natural gas.  
(4) The PIF is a sovereign wealth fund established in Saudi Arabia by virtu e of a Royal 
Decree. The PIF is wholly owned by Saudi Arabia. The PIF invests in Saudi Arabia 
and globally in various sectors and asset classes, including telecoms, aerospace, 
energy, green technologies and security.  
2. THE  OPE RATION  
(5) On 27 March 2019, Saudi A ramco and the PIF entered into a share purchase 
agreement pursuant to which Saudi Aramco agreed to acquire the 70% shares of 
SABIC owned by the PIF (the “Transaction”). Saudi Aramco will thus acquire direct 
sole control of SABIC by virtue of the Transactio n. 
3. THE  CONCE NTRATION  
(6) The Transaction involves the acquisition of sole control over SABIC by Saudi 
Aramco within the meaning of Article 3(1)(b) of the Merger Regulation.  
(7) Although Saudi Aramco and SABIC are both owned by Saudi Arabia, the 
Transaction constit utes a concentration within the meaning of Article 3 of the 
Merger Regulation because each of Saudi Aramco and SABIC forms part of 
different economic units.  
(8) When investigating transactions between state -owned entities (“SOEs”), the 
Commission assesses whether such SOEs constitute separate economic units having 
                                                 
4  SABIC’s second largest shareholder owned approximately 6% of SABIC’s shares at the date of the 
Notification.  
 
 
3 an independent power of decision within the State. If not, the transaction constitutes 
an internal re structuring, which by definition falls outside the scope of the concept of 
concentration under the meaning of Article 3 of the Merger Regulation. According 
to Article 5(4) of the Merger Regulation, read in conjunction with Recital 22 of the 
Merger Regulati on and the Jurisdictional Notice,5 two State -owned enterprises 
("SOEs") will be considered separate economic units having an independent power 
of decision if they have a power of decision independent from each other and 
independent from the State concerned . In order to carry out this assessment, the 
Commission takes into account a number of criteria, developed in its case practice, 
which allow it to ascertain: (i) the SOEs' autonomy from the State in deciding 
strategy, business plan and budget; and (ii) the  possibility for the State to coordinate 
commercial conduct by imposing or facilitating coordination.6 Such coordination is 
assessed on the basis of factors such as the lack of interlocking directorships 
between the SOEs, the existence of specific rules sa feguarding the independence of 
the SOEs toward the State, the information rights of the State  concerning strategic 
business information of the SOEs, or the existence of formal mechanisms and 
safeguards ensuring that commercially sensitive information is n ot shared between 
the SOEs.  
(9) In the present case, Saudi Aramco and SABIC are separate economic units from 
each other, given that the government of Saudi Arabia (the “Saudi State”) does not 
coordinate SABIC’s activities with Saudi Aramco, and that SABIC ope rates 
independently from the Saudi State. As explained below, this is apparent from the 
fact that SABIC is run independently by its “Supervisory Board”, the PIF’s limited 
interference in SABIC’s strategy, SABIC’s arm’s -length relations with Saudi 
Aramco, a nd the fierce commercial negotiations that brought about the Transaction, 
which would not have been necessary if SABIC and Saudi Aramco were already part 
of the same economic unit.  
(10) First, SABIC is run independently by its Supervisory Board, which adopts SA BIC’s 
business plan and budget. Members of SABIC’s Supervisory Board are subject to 
conflict of interest provisions, both under the Saudi Capital Markets Regulations7 
and SABIC’s internal rules,8 which ensure that they do not take instructions from 
                                                 
5  Paragraphs 52 -53, 153 and 194 of the Commission Consolidated Jurisdictional Notice under Council 
Regulation (EC) No 139/2004 on the control of concentrations between undertakings. (the 
“Jurisdictional Notice”)  
6  See for example case COMP/M.7850 - EDF / CGN / NNB Group of companies , decision of 10.03.2006, 
paragraph 30 and seq. and case COMP/M.5549 – EDF/Segebel , decision of 12.11.2009 , paragraph 92 
and seq.  
7  Inter alia, Article  21(a) of Saudi Arabia’s Capital Market Authority’s Corporate Governance Regulations (the 
“CGRs2): the “ Board represents all shareholders; it shall perform its duties of care and loyalty in managing the 
Company ’s affairs and undertake all actions in the general interest of the Company ”. Article 86(2) of the CGRs: 
“a Board Member shall represent all shareholders of the Company and take all actions to achieve the best interests 
of the Company and its shareholders,  while protecting the rights of the other Stakeholders rather than only the 
interests of the group that elected him ”. Article 43 of the CGRs: “ The Board shall develop an explicit and written 
policy to deal with actual and potential conflicts of interest si tuations which may affect the performance of Board 
members ”. Article 44 of the CGRs: “ A member of the Board shall: (1) […] prioritise the interests of the Company 
over his/her own interest […] (2) avoid situations of conflicts of interest […] (3) protect t he confidentiality of the 
information related to the Company and its activities, and not disclose any of such information to any person. ”  
8  Form CO, Annex 5, Appendix 6.4.1 (SABIC’s Conflict of Interest policy); Form CO, Annex 5 
paragraphs 41 -44 of the r esponse to RFI 4; SABIC’s Corporate Code of Ethics (available here: 
https://www.sabic.com/en/investors/corporate -governance/corporation -code -of-ethics ) and S ABIC’s 
Board Charter (available here: y arsabic.com/assets/en/Images/BoardCharter_tcm1010 -12422.pdf)  
 
 
4 just on e shareholder, but act in the interest of all shareholders (including its widely 
dispersed minority shareholders, who own 30% of SABIC). In addition, other than in 
its role of regulator, there is no mechanism for the Saudi State (e.g. as the PIF’s sole 
shareholder) to directly give any orders to SABIC.9  
(11) Second, although the PIF can appoint the majority of Directors to the Board of 
SABIC, unlike Saudi Aramco, whose Board includes ministers of the Saudi 
government none of the members of SABIC’s Supervisory B oard are ministers of 
the Saudi government.10 Moreover, there are no interlocking directorships between 
Saudi Aramco’s Board of Directors and SABIC’s Supervisory Board, nor have there 
been in at least the past five years.11   
(12) Third, the Notifying Party submits that the PIF receives only limited information 
from SABIC in its role as an investor.12 This implies that any material coordination 
of the activities of SABIC with those of Saudi Aramco would be challenging and 
would be carried out without detailed knowledge of SABIC’s pricing, customers or 
overall strategy. Moreover, SABIC does not receive any confidential information 
from or relating to Saudi Aramco, and vice versa.13 
(13) Fourth, the nature of the PIF’s typical role as an institutional investment fund 
appears to have allowed SABIC to manage its business largely independently from 
the PIF (and thus also from the Saudi State). For instance, the Notifying Party 
submits that the PIF’s management or its Board of Directors have not reviewed any 
strategic docum ents assessing SABIC’s performance or strategy, and the PIF has 
[confidential details on interactions between the PIF and SABIC] .14 This suggests 
that the PIF is involved in SABIC’s business and strategy only to a very limited 
extent, and ultimately support s the view that SABIC and Saudi Aramco’s activities 
are not coordinated by the Saudi State.  
(14) Fifth, the Notifying Party submits that the Parties’ commercial interactions are 
limited and at arm’s length.15 The Notifying Party has submitted evidence to show 
that, at least in the vertically affected markets where Saudi Aramco or SABIC acts as  
a supplier of one another, […] .16 In the markets where the Parties overlap, the Parties 
consider and treat each other as competitors, and the Notifying Party submits that 
they act as “ independent stakeholders ” in the three joint ventures in which they both 
participate: the COTC (standing for “Crude oil to chemicals”) complex in Yanbu, 
                                                 
9  Form CO, Annex 5, paragraphs 36 and 48 of the response to RFI; paragraph 29 of the response to RFI 
6. 
10  Form CO, Annex 5, paragraph 7 of the response t o RFI 1.  
11  Form CO, Annex 5, paragraph 15 of the response to RFI 4; Annex 5, Appendices 6.6.1 and 6.6.2.  
12  Form CO, Annex 5, paragraph 2 of the response to RFI 4; paragraph 106 of the response to RFI 6. This 
includes the disclosure of […]. 
13  Form CO, An nex 5, paragraph 12 of the response to RFI 1; paragraphs 1 and 8 of the response to RFI 4.  
14  Notifying Party’s response to RFI 9, paragraph 17. Form CO, Annex 5, paragraphs 57 -60 and 106 of 
the response to RFI 6.  
15  Form CO, Annex 5, paragraphs 11 -12 of t he response to RFI 1; paragraph 16 of RFI 4 and questions 12 
and 13 RFI 6 and to question 1 of the Notifying Party’s response to RFI 9.  
16  Notifying Party’s response to question 1 of RFI 9 (including Annex 9.1).  
 
 
5 Saudi Arabia; Marafiq (a power and water utility joint -stock company in Saudi 
Arabia) and D ussur (an investment company within Saudi Arabia).17  
(15) Lastly, the Parties’ internal documents evidence that the Transaction was fiercely 
negotiated at arm’s length, and gave rise to lengthy exchanges between Saudi 
Aramco and the PIF in the course of a full negotiation process.18 Separate advisors 
were hired by Saudi Aramco and the PIF , numerous non -disclosure agreements were 
signed, and Saudi Aramco insisted on proceeding with a confirmatory due diligence 
[…].19 There were material disagreements on key commerc ial terms such as […].20 
A separate committee was set up within Saudi Aramco’s Board, with strict ring -
fencing of confidential information and conflict of interest provisions in place, to 
determine the appropriate valuation for the bid to acquire Saudi Aram co.21 Such 
arm’s length negotiations, and material costs that these negotiations involved, would 
not have been necessary if the Transaction were an internal restructuring where the 
Parties were already part of one economic unit within Saudi Arabia.  
4. UNION D IME NSION  
(16) The Parties have a combined aggregate worldwide turnover of more than EUR 5 000 
million22 [Saudi Aramco: EUR […] million, SABIC: EUR […] million]. Each of 
them has a Union -wide turnover in excess of EUR 250 million [Saudi Aramco: EUR 
[…] million, SABIC: EUR […] million], but neither of the Parties achieves more 
than two -thirds of their aggregate Union -wide turnover within one and the same 
Member State. The notified operation therefore has a Union dimension.  
(17) As mentioned in paragraph (7) above, Saudi Aramco and SABIC are both owned by 
the Saudi State. In accordance with the principle of non -discrimination between the 
public and private  sectors, Recital (22) of the Preamble to the Merger Regulation 
notes  that the turnover of an undertaking, be it controlled by a public or private 
entity, shall encompass the sales of all the undertakings making up an economic unit 
with an independent pow er of decision. In the present Decision, the concentration 
has a Union dimension on the sole basis of the respective turnovers of Saudi Aramco 
and SABIC. In addition, SABIC does not achieve more than two -thirds of its 
aggregate Union -wide turnover within o ne Member State. Consequently, for the 
purpose of assessing the Union dimension of the concentration, it is not necessary to 
assess whether Saudi Aramco is part of a wider economic unit.   
 
                                                 
17  Form CO, Annex 5, paragraph 12 of the re sponse to RFI 1. See also paragraphs referred to in footnote 
15 above.  
18  Form CO, Annex 5, response to questions 2 and 10 of RFI 6, and Appendices 6.4.2 and 6.10.1 to 
6.10.11 . 
19  Form CO, Annex 5, response to RFI 6, paragraphs 69 and 73 to 79.  
20  Form CO, Annex 5, response to RFI 6, paragraphs 69, 80 to 86.  
21  Form CO, Annex 5, response to RFI 6, paragraphs 6, 50 and 69.  
22  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
 
 
6 5. ANALYTICAL FRAME WORK AND RE LE VANT MARKE TS  
5.1. Analytical framework  
 
(18) Under Articles 2(2) and 2(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 position.  
(19) 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”)23 distinguish between two main ways in which 
mergers between actual or potential competitors on the same relevant market may 
significantly impede effective competition, namely (a) by eliminating important 
competitive constraints on one or more firms, which consequently would have 
increa sed market power, without resorting to coordinated behaviour (non -
coordinated effects); and (b) by changing the nature of competition in such a way 
that firms that previously were not coordinating their behaviour are now 
significantly more likely to coordi nate and raise prices or otherwise harm effective 
competition. A merger may also make coordination easier, more stable or more 
effective for firms, which were coordinating prior to the merger  (coordinated 
effects).24  
(20) In addition, a merger can also entail v ertical effects when it involves companies 
operating at different levels of the same supply chain. Pursuant to the Commission 
Guidelines on the assessment of non -horizontal mergers under the Council 
Regulation on the control of concentrations between under takings (the “Non -
Horizontal Merger Guidelines”),25 vertical mergers do not entail the loss of direct 
competition between merging firms in the same relevant market and provide scope 
for efficiencies. However, there are circumstances in which vertical merger s may 
significantly impede effective competition. This is in particular the case if they give 
rise to foreclosure.26 The Non -Horizontal Merger Guidelines distinguish between 
two forms of foreclosure: input foreclosure, where the merger is likely to raise co sts 
of downstream rivals by restricting their access to an important input, and customer 
foreclosure, where the merger is likely to foreclose upstream rivals by restricting 
their access to a sufficient customer base.27   
5.2. Relevant markets  
(21) In the present case, as further detailed below, and in view of the supply by both 
Parties of certain chemical products, the Transaction gives rise to horizontally 
affected potential markets with regard to:  
                                                 
23  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.  
24  Horizontal Merger Guidelines, paragraph 22.   
25  OJ C 265, 18.10.2008, p. 6  
26  Non-Horizontal Merger Guidelines, para 18.  
27  Non-Horizonta l Merger Guidelines, para 30.  
 
 
7  butyl rubber (see Section 6.1 below);  
 ethylene glycols (“EGs”) (see Section 6.2 below);  
 ethylene propylen e terpolymer rubber and ethylene propylene co -polymer 
(together, “EP(D)M”) (See Section 6.3 below);  
 polyethylene (see Section 6.4 below);  
 polypropylene resins (“PP resins”) (see Section 6.5 below);  
 ethanolamines (“EOAs”) (see Section 6.6 below); and  
 pygas (see Section 6.7 below).  
(22) In addition, the Commission also conducted an assessment with regard to the 
following horizontally overlapping products that either (i) are not affected based on 
the Notifying Party’s estimates but for which  the Parties’ market shares appear to be 
close to the 20% threshold, or (ii) for which the Notifying Party did not provide 
market shares:  
 tailgas (see Section 6.8 below);  
 raffinate -2 (see Section 6.9 below); and  
 polybutadiene rubber (“PBR”) (see Se ction 6.10 below).  
(23) Section 6 of this Decision sets out the Commission’s assessment for each of the 
abovementioned horizontal overlaps. The assessment s are presented separately for 
each horizontal overlap, whereby the competitive assessment of the relevant overlap 
immediately follows the relevant market definition.  However, as further detailed 
below in Section 6, the horizontal overlaps arising from th e Transaction are limited 
and are unlikely to raise serious doubts as to their compatibility with the internal 
market.  
(24) In addition, and as illustrated below, in view of the Parties’ activities in the supply of 
distinct chemical products, which are however part of the same production value 
chain, the Transaction gives rise to vertically affected potential markets with regard 
to: 
 hydrogen, upstream, with hydrogenated nitrile butadiene rubber, downstream 
(see Section 7.1 below);  
 ethylene oxide, upstream, with ethylene glycols, downstream (See Section 7.2 
below);  
 butadiene, upstream, with chloroprene rubber, downstream (See Section 7.3 
below); and  
 ethylene and butene -1, upstream, with polyethylene, downstream (See Section 
7.4 below).  
(25) In addition, the Commission also conducted an asses sment with regard to one 
vertical link that would be vertically affected due to the Parties’ combined market 
 
 
8 shares in the supply of the downstream product in the EEA in 2017 and 2016 (but 
not in 2018), namely:  
 ethylene, propylene and hexene -1, upstream, w ith ethylene propylene 
terpolymer rubber and ethylene propylene co -polymer, downstream (see Section 
7.5 below);  
(26) Section 7 sets out the Commission’s as sessment for each of the abovementioned 
vertical links. The assessments are presented separately for each vertical link, 
whereby the competitive assessment of the relevant link immediately follows the 
relevant market definition. However, as further detaile d below in Section 7 of the 
Decision, the vertical links arising from the Transaction are limited and are unlikely 
to give rise to serious doubts as to their compatibility with the internal market.  
6. HORIZONTAL OVE RLAPS – MARKE T DE FINITION AND  COMPE TITIVE ASSE SSME NT  
6.1. Butyl rubber  
6.1.1.  Market definition  
(27) Butyl rubber is an elastomer produced by polymerisation of isobutylene with a 
smaller amount of isoprene. Butyl rubber can be further halogenated using chlorine 
or bromine processes. The products obtained are refe rred to, separately as 
halogenated chlorobutyl rubber and halogenated bromobutyl rubber (respectively), 
or jointly as halogenated butyl rubber – as opposed to non -halogenated butyl rubber. 
Around 75% of global butyl rubber output is in the form of halogena ted butyl rubber 
(with the remainder being non -halogenated butyl rubber). All major global butyl 
rubber producers produce both regular and halogenated butyl rubber.  
(28) Due to its high degree of gas impermeability, butyl rubber is widely used to produce 
a ran ge of rubber goods such as inner tubes, sealants, air cushions, pneumatic 
springs and similar products. Its main use is the production of inner liners and inner 
tubes for tyres. As a result, the automotive industry accounts for approximately 70% 
of global butyl rubber consumption. There are also smaller applications in the 
pharmaceutical industry (e.g. sealants for medicine bottles, pharmaceutical 
packaging), and in the food industry (e.g. chewing gum).  
6.1.1.1.   Product market definition  
The Commission’s precedents  
(29) In Dow/DuPont, the Commission identified a separate product market for butyl 
rubber.28  In subsequent cases involving synthetic elastomers, the Commission has 
also considered that individual synthetic elastomer families could constitute separate 
product markets due to their specific properties, but ultimately left the question 
open.29   
                                                 
28  Under the name IIR (Isobutene isoprene rubber), which is another way of referring to butyl rubber. See 
case IV/M.663 - Dow/DuPont , decision of 21.02.1996.  
29  See case COMP/M.3733 - Dow/DDE , decision of 26.04.2005.  
 
 
9 The Notifying Party’s view  
(30) The Notifying  Party considers that butyl rubber forms a separate product market but 
submits that the precise product market definition ca n be left open as the Transaction 
would not lead to competitive concerns irrespective of the market definition.30    
The Commission’s assessment  
(31) The Commission’s market investigation confirmed that butyl rubber likely forms a 
separate product market from ot her elastomers. Respondents generally considered 
that butyl rubber is not substitutable with other products, given its superior 
performance as an air barrier in the tyre industry, as well as the restrictions inherent 
to the registration of formulations for  use in healthcare packaging.31 Respondents 
further indicated that halogenated and non -halogenated rubber are also not generally 
substitutable with each other, in particular because non -halogenated butyl rubber 
cannot be co -vulcanised with other tyre materi als and is therefore not suitable for 
inner liner applications.32 Responses from the market investigation indicated that, 
within the halogenated category, a distinction may be drawn between bromobutyl 
and chlorobutyl as they can be used for the manufacture of different types of tyres, 
however they also indicated that further segmentation is unlikely to be justified.33 
The market investigation also suggested that butyl rubber and its segments are 
somewhat homogeneous products across suppliers (at least as rega rds products 
sourced by major tyre manufacturers),34 and that from a supply -side perspective it is 
generally possible to switch production between the different types without incurring 
very large costs.35 
(32) In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for butyl rubber can be 
left open, since the Transaction does not raise serious doubts as to its compatibility 
with the internal market, under any plausible product market d efinition (i.e. butyl 
rubber overall or segmented between non -halogenated and halogenated, and further 
sub-segmented between halogenated bromobutyl or chlorobutyl rubber).  
6.1.1.2.  Geographic market definition  
The Commission’s precedents  
(33) In Dow/DuPont, the Commission considered the relevant geographic market for 
butyl rubber to be at least EEA -wide, and probably larger, ultimately leaving the 
                                                 
30  Form C O, paragraphs 578 -580. 
31  Responses to questions 3.1 and 6.1 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber . 
32  Responses to question 4.1 of Q1 - Questionnaire to competitors and customers of Butyl rubber and 
Polybutadiene rubber . 
33  Responses to questions 4.1 and 5.1 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber . 
34  It must be noted that for certain smaller applications, such as in the pharmaceutical and food industr ies, 
only certain grades of butyl rubber can be used, and thus the product homogeneity between suppliers  is  
reduced.  
35  Responses to questions 8.1, 7.1 and 7.2 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene rubber . 
 
 
10 geographic market definition open.36 In subsequent cases involving synthetic 
elastomers, the Commission has also consi dered that the relevant geographic market 
was at least EEA -wide, and probably larger, though it ultimately left open the 
precise geographic market definition.37   
The Notifying Party’s view  
(34) The Notifying Party considers that the geographic market for butyl rubber is global 
or at least EEA -wide in scope.38  
(35) First, the Notifying Party argues that each major butyl rubber manufacturer only has 
a few production facilities, which are able to serve customers around the globe. The 
Notifying Party further claims that manufacturers use multiple production sites from 
different geographic locations to supply butyl rubber to the same customer.  
(36) Second, the Notifying Party explains that the major butyl rubber customers are 
global tyre manufacturers with worldwide presence i n the tyre industry, with the 
ability to source butyl rubber worldwide, and also to multisource from suppliers 
located in various locations worldwide with relatively frequent changes in product 
flows. More generally, the Notifying Party claims that there a re significant trade 
flows across regions.  
(37) Third, the Notifying Party considers that production costs are comparable among 
various location facilities, and that neither transportation costs, nor import duties 
constitute significant barriers to trading buty l rubber across regions.  
The Commission’s assessment  
(38) All respondents to the market investigation considered that the relevant geographic 
scope for butyl rubber and its possible sub -segments is likely worldwide. 
Respondents expressed that both the supply of  and demand for butyl rubber are 
global, with regular trade flows between regions.39 The majority of respondents also 
indicated that, for the most part, there are no technical, economic or regulatory 
barriers to purchasing or selling butyl rubber at a world wide level at competitive 
terms, with the exception of recently imposed anti -dumping duties in China.40 
Accordingly, the vast majority of customers responding to the market investigation 
confirmed that suppliers’ plants outside the EEA could credibly sell b utyl rubber to 
customers in the EEA.41 
(39) In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for butyl rubber can be 
left open, since the Transaction does not raise serious  doubts as to its compatibility 
                                                 
36  Under the name IIR, which stands for isobutene isoprene rubber, and is another way of referring to 
butyl rubber. See case IV/M.663 - Dow/DuPont , decision of 21.02.1996.  
37  See case COMP/M.3733 - Dow/DDE , decision of 26.04.2005.  
38  Form CO, paragraphs 581 -584. 
39  Responses to questions 9.1 and 11.1 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene rubber . 
40  Responses to question 12.1 of Q1 - Questionnaire to competitors and customers of Butyl rubber and 
Polybutadiene rubbe r. 
41  Responses to question 11 of Q1 - Questionnaire to competitors and customers of Butyl rubber and 
Polybutadiene rubber . 


 
 
13 6.1.2.1.  Non-coordinated effects  
The Notifying Party’s view44 
(44) The Notifying Party submits that the Transaction is unlikely to give rise to any 
horizontal non -coordinated effects in the market for butyl rub ber that would 
represent a significant impediment to effective competition.45 The Notifying Party 
claims that SABIC is an insignificant player in this market, and that the market share 
increment brought by SABIC is negligible (less than [0-5]%) regardless o f the 
product market definition adopted. It considers that the Parties are not close 
competitors for butyl rubber, in light of the fact that SABIC only sells scrap material 
and only has one customer. The Notifying Party further claims that the combined 
entity would continue to face competition from a number of strong competitors, such 
as ExxonMobil (the largest player worldwide), NKNK and Cenway Technologies, as 
well as other smaller players. Further, the Notifying Party submits that barriers to 
enter the b utyl rubber business are small, as is reflected by the recent construction of 
a new butyl rubber plant in India, where no other butyl rubber production facility 
existed before,46 as well as other recent expansions in Singapore and China. Lastly, 
it submits that the Parties’ largest customers are global tyre manufacturers with 
significant countervailing buyer power.  
The Commission’s assessment  
(45) At worldwide level, the Parties’ combined market share in the overall market for 
butyl rubber in 2018 was [20-30]%, with a negligible increment of [0-5]% from 
SABIC, and a HHI increment of less than 150. The Parties’ shares in each of the 
potential sub -segments are also modest. In halogenated butyl rubber, their combined 
share was [20-30]%  with a [0-5]% increment and a HHI increment below 150. In 
halogenated bromobutyl rubber, the Parties’ combined share was [20-30]%  with a 
[0-5]% increment and a HHI increment below 150. In non -halogenated butyl rubber, 
their combined share was [20-30]%  with a [0-5]% increment and a HHI increment 
below 150.47 
(46) The results of the market investigation broadly confirmed that the Notifying Party’s 
market share estimates are reliable and, in particular, that SABIC is a small supplier 
of butyl rubber (and its sub -segments) worldwide.48 The majority of respondents 
confirmed that, post -Transaction, there will remain a number of credible competitors 
in the market to constrain the combined entity, such as ExxonMobil, NKNK and 
Sibur Petrochemicals, among others, and that customers  will continue to have a 
                                                 
44  The Notifying Party’s arguments are presented for the overall market of butyl rubber only. However, 
the Notifying Party also submits that there are no significant variations in the competitive dynamics of 
the potential sub -segments of butyl rubber (Form CO, paragraph 592).  
45  Form CO, paragraphs 591 -655. 
46  This is the Rel iance Sibur Elastomers butyl rubber manufacturing facility that is being constructed in 
Jamnagar, Gujarat, India. This facility is operated as a joint venture between Sibur Petrochemicals and 
Reliance Industries. Once fully operational, it is expected to h ave an annual production capacity of 120 
KT. Form CO paragraph 625.  
47  Source: Annex RFI 2.25 Shares butyl rubber and sub -segments .  
48  Responses to questions 17 and 18 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene ru bber . 
 
 
14 sufficient choice of credible suppliers to meet their needs.49 Moreover, the majority 
of customers responding to the market investigation confirmed that they typically 
procure butyl rubber from multiple suppliers, find no significan t barriers or costs to 
switching suppliers, and have switched supplier in the last three years.50 Although 
respondents considered that entry into the butyl rubber market could be challenging, 
they also identified a number of players who had entered or expan ded in the past five 
years (e.g. NKNK, Cenway Technologies, Chambroad) and other players who were 
planning to enter or expand in the near future (e.g. Cenway Technologies, and a JV 
between Reliance Industries and Sibur Petrochemicals in Jamnagar, India).51  
Finally, the majority of respondents to the market investigation did not consider that 
the Transaction would have any negative impact on prices, quality, choice or 
innovation for the worldwide market for butyl rubber. More generally, no material 
concerns were raised regarding the Parties’ horizontal overlap in butyl rubber.52  
6.1.2.2.  Coordinated effects  
(47) As set out above, SABIC is not an important player in the butyl rubber market as it 
only sells “scrap” butyl rubber and has a market share of no more than [0-5]% 
worldwide. The results of the market investigation broadly confirmed that the 
Notifying Party’s market share estimates are reliable and, in particular, that SABIC 
is a small supplier of butyl rubber (and its sub -segments) worldwide.53 Accordingly, 
the Commis sion does not consider that the mere reduction in the number of firms in 
the market (through the loss of SABIC as a competitor) is a factor that, in itself, 
facilitates coordination. However, SABIC is a partner of ExxonMobil, the largest 
player, in the Kem ya JV, a 50/50 joint venture producing butyl rubber at a plant in 
Al Jubail, Saudi Arabia.  
(48) The Kemya JV was established in 1980, primarily with the objective of producing 
polyethylene, but it has expanded since into the production of other petrochemical 
products, including butyl rubber.54 The Kemya JV manufactured […] kt of butyl 
rubber in 2018, and accounts for around [0-5]% market share of butyl rubber 
worldwide.  
(49) The Transaction therefore creates a structural change in the butyl rubber market. 
Post-Transa ction, Saudi Aramco and ExxonMobil will participate in a joint venture, 
which produces around [0-5]% of worldwide butyl rubber sales and [Information on 
the split of profits between the Kemya JV’s parents] . In this Section, the 
                                                 
49  Responses to questions 17 and 30 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber . 
50  Responses to questions 14 and 25, and 26 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybu tadiene rubber . 
51  Responses to questions 27, 28 and 29 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene rubber . 
52  Responses to questions 31.2 and 32 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber an d Polybutadiene rubber . 
53  Responses to questions 17 and 18 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber . 
54  The Kemya JV also manufactures styrene butadiene rubber, thermoplastic elastomers, carbon black, 
ethylene propylene co -polymer. Other than butyl rubber, none of the products manufactured by the 
Kemya JV appear likely to give rise to coordinated effects, as butyl rubber is the only product market in 
which the Parties hold a material share, ExxonMobil is a  major player, and the market is concentrated.  
 
 
15 Commission assesses whether this structural change can significantly impede 
effective competition, through the creation or strengthening of a collective dominant 
position in the relevant market(s) for butyl rubber . For this purpose, the Commission 
assesses whether such change increases the likelihood that E xxonMobil and Saudi 
Aramco are able to coordinate, or makes coordination between the firms easier, 
more stable, or more effective.  
The Notifying Party’s view  
(50) The Notifying Party submits that the Transaction will not give rise  to horizontal 
coordinated effects because it does not change the market structure, and because the 
indirect structural link between Saudi Aramco and ExxonMobil will not facilitate 
coordination due to the strict confidentiality provisions in place.55  
(51) Firstly, the Notifying Party submits that the Transaction will not result in a market 
share increase. SABIC has no sales of prime -grade butyl rubber, [Information on the 
Kemya JV arrangements] . According to the Kemya Agreements, SABIC only has 
the right to sell  “scrap” butyl rubber (i.e. output neither meeting the agreed product 
specifications nor the required quality for “prime” and “substandard” butyl rubber), 
[…].56 Moreover, all of SABIC’s (scrap) butyl rubber sales are to a single customer 
within Saudi Arabi a. Even if the sales of scrap butyl rubber are taken into 
consideration, the Transaction gives rise to only a minor increment to Saudi 
Aramco’s sales, ranging from below [0-5]% to [0-5]% depending on the type of 
butyl rubber.  
(52) Secondly, the Notifying Party  submits that the Kemya JV will not allow for the 
exchange of sensitive information between ExxonMobil and Saudi Aramco post -
Transaction. It submits that, while the Kemya Agreements contain57 [Details on the 
contractual JV agreements] . 58  
(53) Thirdly, the Notif ying Party argues that it is difficult for the combined entity and 
ExxonMobil to reach a common understanding on possible factors of coordination, 
given that prices in the market for butyl rubber are not transparent. Moreover, the 
Notifying Party submits t hat collusion would not be sustainable due to this lack of 
transparency, that there is no effective deterrent mechanism to enforce any attempted 
coordination, and that customers and competitors would be able to undermine any 
attempt at coordination.59 
(54) Lastly, the Notifying Party emphasizes that with respect to the structural link created 
by the Transaction, which involves the [Information on the profit split among the JV 
shareholders] , the Transaction only introduces a minimal change in the combined 
entity’s incentive to compete, or rather coordinate, on the butyl rubber market. As 
regards ExxonMobil, it argues that ExxonMobil’s incentive to coordinate will not 
change, because the Tran saction does not materially affect the extent to which it can 
recapture any lost sales.  
                                                 
55 Form CO, Annex 20 – Coordinated Effects Analysis – Part 1, paragraphs 1 -27.  
56  For completeness, under the Kemya Agreements, […]. 
57  Such information includes [ …].  
58  Form CO, Annex 20 – Coordinated Effects Analysis – Part 2, paragraph 4.  
59 Form CO, Annex 20 – Coordinated Effects Analysis – Part 2, paragraphs 13 -15.  
 
 
16 (55) The Notifying Party concludes that, in the absence of any changes to market 
structure resulting from the Transaction, there is no plausible risk of horizontal 
coordina ted effects in the butyl rubber market.  
The Commission’s assessment  
(56) As explained in paragraph (19), a merger in a concentrated market can lead to 
anticompetitive horizontal coordinated effects if it significantly impedes effective 
competition, through the creation or strengthening of a collective dominant position, 
because it increases the likelihood that firms are able to coordinate  or makes 
coordinat ion easier, more stable or more effective.  
(57) Pursuant to the Horizontal Guidelines, to assess whether a merger gives rise to 
horizontal coordinated effects, the Commission examines, firstly, whether it would 
be possible to reach terms of coordination60 and, s econdly, whether the coordination 
would be likely to be sustainable.61 In examining the possibility and sustainability of 
coordination, the Commission specifically considers the changes that the transaction 
brings about. The reduction in the number of firms  in a market may in itself be a 
factor that facilitates coordination.  
(58) The following Section focuses on the risk of horizontal coordinated effects arising 
from the Transaction in the market for butyl rubber at worldwide level. However, 
this analysis at worl dwide level would also apply to the EEA, to the extent that the 
relevant geographic market for butyl rubber were considered EEA -wide. This is 
because the market investigation indicated that competitive conditions appear similar 
at EEA -wide and worldwide le vel for the reasons outlined in paragraph (38) above 
and,62 meaning that the analysis regarding whether coordination is possible or 
sustainable is the  same at EEA -level as worldwide.  
Possibility of reaching terms of coordination  
(59) The market investigation indicated that the butyl rubber market has some 
characteristics that may be conducive to reaching a common perception regarding 
how coordination should work.  
 The market investigation broadly confirmed the Notifying Party’s market 
share estimates and, consequently, that the market for the supply of butyl 
rubber is relatively concentrated worldwide, with Saudi Aramco and 
                                                 
60  As regards the possibility of reaching terms of coordination, coordination is more likely to emerge in 
markets where it is relatively simple to reach a common understanding on the terms of coordination. 
Coordination may take various forms, including keeping prices above the competitive level, or dividing 
the market, for instance by customer characteristi cs or by allocating contracts in bidding markets.  
61  As regards the sustainability of coordination, three conditions are necessary for coordination to be 
sustainable. Firstly, the coordinating firms must be able to monitor to a sufficient degree whether th e 
terms of coordination are being adhered to. Secondly, discipline requires that there is a credible 
deterrent mechanism that can be activated if deviation is detected. Thirdly, the reactions of outsiders, 
such as current and future competitors not partici pating in the coordination, as well as customers, 
should not be able to jeopardise the results expected from the coordination.  
62  Responses to questions 9, 10, 11 and 12 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene r ubber . 
 
 
17 ExxonMobil together accounting for more than [60-70]% of total worldwide 
sales.63  
 Moreover, demand is also fairly concentrated, with the top 10 global tyre 
manufacturers representing around 70% of the demand for butyl rubber.64 
While the results of the mark et investigation were somewhat mixed, several 
respondents indicated that for at least some types of customer (e.g. global 
tyre producers), butyl rubber is a relatively homogenous product across 
different suppliers.65  
 Customers further explained that prices  for butyl rubber are generally based 
on formulas which take into consideration the price of hydrocarbons and that, 
insofar as the price of inputs (e.g. isobutylene) is known by market 
participants, there is a moderate level of transparency in the prices c harged 
by suppliers.66  
(60) On the other hand, the market investigation also brought to light some factors that 
suggest that it may not be entirely straightforward to reach terms of coordination in 
relation to butyl rubber.  
 Firstly, as regards demand, the buty l rubber market is growing. IHS Markit 
data indicates that demand has grown at an average rate of 4% per year 
between 2012 -2017 and is expected to increase by 2.3% per year over the 
next five years.67  
 Secondly, as regards supply, a number of competitors ha ve recently 
expanded their production capacity (see paragraph (69) below), to the point 
that the market is characterised by overcapacity.68 Moreover, capacity is 
forecasted to continue to increase by around 4.2% per annum in the next 5 
years, according to IHS Markit (which the market investigation confirmed is 
accurate).69 The market investigation confirmed that suppliers’ capacity has 
been and is continuing to expand rapidly, with respondents pointing to 
expansions by ExxonMobil, Chambroad and Cenway Technologi es, as well 
                                                 
63   Responses to questions 15, 16, 17 and 18 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene rubber . 
64  Form CO, paragraph 605.  
65  At least within each sub -type of butyl rubber (e.g. halogenated chlorobutyl rubbe r from different 
suppliers). Responses to question 8 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber. Notably, for certain applications (e.g. pharmaceutical and food), only 
certain grades of butyl rubber, develop ed by a reduced amount of suppliers can be used, and thus the 
product homogeneity of the product between suppliers is reduced.  
66   Responses to questions 21 and 23 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber . 
67  IHS Markit Report “ Butyl Elastomers ” 15 August 2018, p. 6.  
68  According to the data provided by the Notifying Party (Form CO, Annex 21), the worldwide butyl 
rubber capacity was […]kT  in 2018, while worldwide sales of butyl rubber amounted to […]kT.  
According to data provided by the Notifying Party (Form CO, paragraphs 599 - 622) and the results of 
the market investigation (Responses to question 13 of Q1 - Questionnaire to competitors and customers 
of Butyl rubber and Polybutadiene rubber ), the utilizati on rate of the top 5 butyl rubber manufacturers 
worldwide […]. 
69  IHS Markit Report “ Butyl Elastomers ” 15 August 2018, p. 13.  
 
 
18 as a 120 kilotons -per-annum expansion by a Reliance -Sibur joint venture in 
Jamnagar, India.70  
 Thirdly, the majority of customers suggested that the use of a pricing formula 
means there is a “moderate” degree of price transparency (see paragraph  (59) 
above), but importantly suppliers of butyl rubber who responded to the 
market investigation thought prices are not transparent . Respondents also  
explained that prices are set by way of bilateral negotiations for contracts that 
run for at least a year or, more typically, two years or more.71 
Notwithstanding the fact that input costs represent a significant element of 
pricing for butyl rubber, the No tifying Party submitted data indicating that 
[…].72 
 Fourthly, as outlined in paragraph (47) above, SABIC is not considered a 
material supplier of buty l rubber. Thus, the reduction in the number of firms 
in the market (through the loss of SABIC as a competitor) does not, of itself, 
facilitate coordination by increasing transparency between butyl rubber 
suppliers.  
(61) In addition, in light of the specific cir cumstances of the case, the creation of 
the structural link between Saudi Aramco and ExxonMobil via the Kemya JV is not 
likely to increase the likelihood that butyl rubber suppliers can reach terms of 
coordination, as neither JV partner receives commercial ly sensitive information 
about the other. Pursuant to the bylaws of the Kemya JV, [Information on 
information flow mechanisms in the Kemya JV arrangements ]. Indeed, according to 
the Notifying Party’s submissions and the evidence received by the Commission,73 
all information provided by ExxonMobil to the Kemya JV [Information on 
information flow mechanisms in the Kemya JV arrangements ].74 Therefore, strict 
ring-fencing measures are in place such that post -Transaction the Kemya JV will not 
give Saudi Aramco ins ight into ExxonMobil’s sales, prices or other commercial 
information. [Information on the Kemya JV arrangements ]. 
(62) Overall, however, it is not necessary to conclude on whether it is possible to reach 
terms of coordination on this market, or on the extent to  which the Transaction 
makes reaching terms of coordination possible or easier, as any coordination post -
Transaction would not be sustainable in light of the likely reaction of outsiders, as 
set out below.  
Sustainability of coordination: Monitoring deviati ons 
(63) For similar reasons as outlined above, the evidence is mixed on whether the 
worldwide market for butyl rubber is sufficiently transparent to allow the combined 
entity and ExxonMobil to monitor deviations from any hypothetical coordination. 
                                                 
70  Responses to questions 27 and 28 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber  – see also footnote 46. 
71  Responses to questions 21 and 23 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber . 
72  See chart in page 2 of M.9410 – Saudi Aramco – SABIC – response to follow up question on RFI 7 .   
73  [Information on information flow mechanisms in the Kemya JV arrangements ], they were provided to 
the Commission directly by ExxonMobil as part of a submission made by ExxonMobil on 03.02.2020.  
74  Form CO, Annex 20 – Coordinated Effects Analysis – Part 2, paragraph 5.  
 
 
19 On the one h and, there are few significant suppliers worldwide and global tyre 
producers account for 70% of worldwide purchases of butyl rubber. Prices are 
generally linked to raw material costs, and are as a result updated/indexed on 
average monthly or less.75 That sa id, contracts (and so, the Commission understands, 
the pricing mechanism that applies throughout the contract) are updated less 
frequently – at least yearly, and typically every two years or more.76 Customers 
consider that there is “moderate” price transpar ency, likely as price movements are 
linked to raw material costs (though, importantly, suppliers consider price 
transparency to be low). Moreover, contracts are negotiated bilaterally, and the 
market investigation did not provide any evidence to suggest th at suppliers would 
have insight into prices an individual customer agrees with another supplier. For the 
reasons noted in paragraph (61) above, the c reation of a structural link via the 
Kemya JV does not appear to affect Saudi Aramco or ExxonMobil’s ability to 
monitor deviations.  
(64) Overall, however, it is not necessary to conclude on whether market transparency is 
such that monitoring allows for the thre at of timely and sufficient retaliation to any 
deviation, as any coordination post -Transaction would not be sustainable in light of 
the likely reaction of outsiders, as set out below.  
Sustainability of coordination: Deterrent mechanisms  
(65) The Notifying Party  has not provided the Commission with sufficient evidence to 
exclude that there could be a sufficiently severe and credible deterrent mechanism to 
convince Saudi Aramco or ExxonMobil to adhere to the terms of any hypothetical 
coordination. On the one hand,  the market investigation indicated that the gain from 
deviating at the right time could be significant. Contracts for butyl rubber are 
renegotiated at least yearly, and typically every two years or more. The top 10 global 
tyre manufacturers are very signi ficant customers of butyl rubber, representing 70% 
of worldwide demand.77 Most customers multi -source, consider that there are no 
barriers to switching other than the need to qualify the supplier’s plant and product, 
and indeed have switched butyl rubber su pplier in the last three years.78 The 
Notifying Party provides an indicative example that illustrates the potential gain 
from deviation – in 2012, […] (one of the world’s top 5 largest tyre producers) 
switched all of its worldwide butyl rubber purchases awa y from Saudi Aramco to 
Russian manufacturers, as they offered lower prices.79  
(66) On the other hand, Saudi Aramco and SABIC appear to have significant 
sale/purchase relations with ExxonMobil that might (in principle) allow for 
retaliation outside the butyl rub ber market.80 The Notifying Party has not identified 
                                                 
75  Responses to question 23.3 of Q1 - Questionnaire to competitors and customers of Butyl rubber and 
Polybutadiene rubber . 
76  Responses to question 23.2 of Q1 - Questionnaire to competitors and custome rs of Butyl rubber and 
Polybutadiene rubber . 
77  Form CO, paragraph 601.  
78  Responses to question 14, 25 and 26 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene rubber . 
79  Form CO, Annex 20 – Coordinated Effects Analysis – Part 2, paragraphs 53.  
80  To take just one product as an example, SABIC supplied $[…] of ethylene to ExxonMobil and 
procured $[…] of ethylene from it. Form CO, Annex 20 – Coordinated Effects Analysis – Part 2, 
paragraphs 94 and 96.  
 
 
20 the full extent of these sale/purchase relations, the value of these relations by 
product, or the extent to which these arrangements may allow for retaliation.81 The 
Commission therefore is not able to exc lude that, if non -compliance can be 
identified, a timely and effective deterrence mechanism would be available. For 
completeness, termination of the Kemya JV (or its butyl rubber production) does not 
appear to be an effective deterrence mechanism [Informat ion on the Kemya JV 
arrangements ].82 
(67) Overall, however, it is not necessary to conclude on whether a sufficiently severe 
and credible deterrent mechanism is available, as any coordination post -Transaction 
would not be sustainable in light of the likely react ion of outsiders, as set out below.  
Sustainability of coordination: Reaction of outsiders  
(68) The sustainability of any attempted coordination between Saudi Aramco and 
ExxonMobil is likely to be jeopardised by the reaction of non -coordinating 
competitors and c ustomers.  
(69) First, as regards competitors, Saudi Aramco and ExxonMobil’s rivals are well -
placed to jeopardise any coordination and are incentivised to do so. There is global 
overcapacity for butyl rubber compared with demand, with operating rates declining 
from approximately 81% in 2010 compared with 72% in 2017.83 The market 
investigation confirmed that a number of competitors (to Saudi Aramco and 
ExxonMobil) have been increasing worldwide butyl rubber production capacity in 
recent years and are continuing to  do so.84 The market investigation pointed to 
expansions by Chambroad and Cenway Technologies, as well as a 120 kilotons -per-
annum expansion by a Reliance -Sibur joint venture in Jamnagar, India.85 Significant 
expansions are also planned by NKNK in Russia in 2020 (adding 55 kilotons -per-
annum to an existing plant) and Shandong Senchi in China in 2020 (building a new 
butyl rubber plant with capacity of 60 kilotons -per-annum).86 The market 
investigation confirmed that these competitors that have expanded capacity  
(Chambroad, Cenway Technologies, Reliance -Sibur, NKNK, Shandong Senchi) are 
all credible suppliers of butyl rubber in the EEA and worldwide.87 As such, 
competitors operating with spare capacity and, in particular, with recent expansions, 
act as a significa nt constraint on Saudi Aramco and ExxonMobil and are likely to 
make any attempted coordination unsustainable.  
(70) Second, as regards customers, the market investigation has confirmed that customers 
multi-source, can switch supplier and that the majority have done so in the last three 
                                                 
81  Form CO, Annex 20 – Coordinated Effects Analysis – Part 2, paragraphs 92 -96. 
82  Form CO, Annex 20 – Coordinated Effects Analysis – Part 2, paragraphs 20, 97 -104. 
83  IHS Markit report, “ Butyl Elastomers ”, 15 August 2018, p.13.  
84  Responses to questions 27 and 28 of Q1 - Ques tionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber . 
85  Responses to questions 27 and 28 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber  – see also footnote 46. 
86  IHS Markit Report “ Butyl Elastomers ” 15 August 2018, p. 28.  
87  Responses to questions 16, 17 and 18 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene  rubber . 
 
 
21 years.88 Indeed, for at least the global tyre manufacturers, butyl rubber is a relativ ely 
homogenous product across different suppliers.89 As outlined in paragraph (69) 
above, global tyre manufactures account for a significant proportion of the market 
and the real risk of losing such a customer is likely to make coordination 
unsustainable. As a result, the ri sk of a large customer tempting deviation or reacting 
to coordination by switching to a non -coordinating firm is high. No material 
concerns were raised regarding butyl rubber, and the vast majority of customers 
responding to the market investigation confir med that they consider they will 
continue to have access to a sufficient choice of credible suppliers post -Transaction, 
and that the Transaction will not have any impact on price, quality, choice or 
innovation regarding butyl rubber.90   
Conclusion  
(71) In concl usion, for the reasons set out above, the Commission considers that the 
Transaction does not raise serious doubts as a result of horizontal non -coordinated or 
coordinated effects concerning butyl rubber. As regards non -coordinated effects, this 
is in parti cular because of the Parties’ modest combined market shares and the 
negligible increment from SABIC. As regards coordinated effects, the creation of a 
structural link between Saudi Aramco and ExxonMobil will not increase the risks of 
coordination, in parti cular because any attempted coordination will not be 
sustainable given the likely response by competitors (who have significant spare 
capacity and continue to expand capacity and are well placed to compete for 
customers) and customers (who are well placed to switch very significant orders 
either to new suppliers or to tempt deviation).  
6.2.Ethylene glycol (“EGs”)  
6.2.1.  Market definition  
(72) Ethylene glycols (“EGs”) are colourless, odourless, relatively non -volatile liquids. 
EGs are mainly produced from ethylene oxide (“ EO”) (around 90%) or, less 
frequently, from coal.91 The production of EGs from EO results in the simultaneous 
production of three types of EG: mono -ethylene glycol (“MEG”) (around 90% of the 
production), and the co -products di -ethylene glycol (“DEG”) and tr i-ethylene glycol 
(“TEG”) (which account for only around 9% and 1% of EG production).  
(73) MEG  is primarily used as the main input in the production of polyesters, which are 
subsequently used in the production of fibres, films and resins used to make plastic 
(PET) bottles. MEG is also used as an input material in the production of 
polyalkylene glycol. In addition, due to its low freezing point, MEG is also used in 
antifreeze solutions.  
                                                 
88  Responses to question 14, 25 and 26 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene rubber . 
89  At least within each sub -type of butyl rubber (e.g. halogenated chlorobutyl rubber from different 
suppliers). Responses to question 8 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber  
90  Responses to questions 30 and 31.2 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene rubber . 
91  Only the  so-called “coal to MEG” processes can produce mono -ethylene glycol without di -ethylene 
glycol and tri -ethylene glycol as by -products.  
 
 
22 (74) DEG  is used as a raw material for the production of polyurethanes and unsatur ated 
polyester resins. Similarly to MEG, DEG can also be blended into antifreeze 
solutions.  
(75) TEG  is used for the dehydration of gases, the manufacture of insecticides, the 
synthesis of some organic derivatives and the production of plasticizers.  
6.2.1.1.  Product market definition  
The Commission’s precedents  
(76) The Commission has considered the market for EGs and its potential sub -segments 
in previous decisions.92 While noting that MEG, DEG and TEG are used in different 
applications, the Commission acknowledged that f rom a supply -side perspective 
these three products were at that time invariably produced together and in the same 
proportions.93 The Commission ultimately left open whether EGs constitute a 
separate single product market or whether they should be further su b-segmented 
between MEG, DEG and TEG.94 
The Notifying Party’s view  
(77) The Notifying Party submits that it does not disagree with the Commission’s 
precedents, but considers that for the purposes of the present Decision, the exact 
product market definition can b e left open.95 
The Commission’s assessment  
(78) The majority of respondents to the market investigation indicated that EGs are not 
substitutable with other products, explaining that EGs have specific properties and 
applications that are challenging to replicate at a competitive level.96 Further, while 
the majority of respondents consider that the different types of EG (i.e. MEG, DEG 
and TEG) are likely not substitutable with each other from a customer perspective in 
light of their different properties, responses t o the market investigation indicated that 
the different types of EGs are typically produced together and through the same 
process from EO.97  
(79) In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the produ ct market definition for EGs can be left open, 
                                                 
92  See case COMP/M.4094 - Ineos/BP Dormagen , decision of 10.08.2006. See also cases COMP/M.4005 
- Ineos/Innovene , decisi on of 09.12.2005, COMP/M.3467 - Dow Chemicals/PIC/White Sands JV , 
decision of 28.06.2004 and COMP/M.2345 - Deutsche BP/Erdölchemie , decision of 26.04.2001.  
93  New so -called “coal to MEG” processes now allow for the production of MEG only, using coal as an 
input. However, these technologies were not available at the time of case COMP/M.4094 - Ineos/BP 
Dormagen.  
94  The Commission also considered and rejected a product market encompassing both EGs and purified 
EO. It found that there is a relationship between the production of purified EO and EGs (as they are 
produced from the same raw material), but as the products are made using different equipment and 
processes it concluded that there is no supply -side substitutability between them. See case 
COMP/M.4094 - Ineos/BP Dormagen , decision of 10.08.2006, paragraph 55.  
95  Form CO, paragraphs 263 -264. 
96  Responses to question 3 of Q2 - Questionnaire to competitors and customers of Ethylene glycols.  
97  Responses to questions 4 and 6.1, 10.3, 11 of Q2 - Questionnaire to  competitors and customers of 
Ethylene glycols . 
 
 
23 since the Transaction does not raise serious doubts as to its compatibility with the 
internal market, under any plausible product market definition (i.e. EGs overall or 
segmented between MEG, DEG and TEG).  
6.2.1.2.  Geographic market definition  
The Commission’s precedents  
(80) In previous decisions, the Commission has considered whether the relevant 
geographic market for EGs and its potential sub -segments could be at least EEA -
wide, Western Europe, or possibly global in scope, but ultimately left open the exact 
geographic market definition.98  
The Notifying Party’s view  
(81) The Notifying Party submits that it does not disagree with the Commission’s 
precedents, but it considers that for the purposes of the present Decision, the  exact 
geographic market definition can be left open. 99 
The Commission’s assessment  
(82) The market investigation indicated that the relevant geographic market for EGs is 
likely worldwide, or at least EEA -wide.100 All respondents consider the market for 
EGs to be  worldwide, pointing to significant patterns of trade worldwide, the ease of 
transporting EGs and the fact that MEG, DEG and TEG are commodity products.101 
Customers responding to the market investigation confirmed that they can and do 
source EGs from suppli ers based outside the EEA for use in their facilities within the 
EEA.102 While some respondents identified that there are some tariffs and import 
duties between regions, they emphasised that trade flows for EGs remain global.103 
(83) In any event, the Commission co nsiders that, for the purposes of the present 
Decision , the exact scope of the geographic market definition for EGs can be left 
open between EEA and worldwide, since the Transaction does not raise serious 
doubts as to its compatibility with the internal ma rket, under any plausible 
geographic market definition.  
6.2.2.  Competitive assessment  
(84) Both Parties supply EGs (including MEG, DEG and TEG). SABIC is active in the 
EEA and worldwide, whereas Saudi Aramco’s activities are more limited as it only 
                                                 
98  See cases COMP/M.4094 - Ineos/BP Dormagen , decision of 10.08.2006, COMP/M.4005 - 
Ineos/Innovene , decision of 09.12.2005, COMP/M.3467 - Dow Chemicals/PIC/White Sands JV , 
decision of 28.06.2004 and COMP/M.2345 - Deutsche BP/Erdölchemie , decision of 26.04.2001.  
99  Form CO, paragraphs 265 -267. 
100  The market investigation strongly indicated that a market limited to Western Europe would not be 
appropriate for EGs or any of it s sub -segments for the purposes of the present Decision, so it is not 
considered further in this Decision.  
101  Responses to question 7 of Q2 - Questionnaire to competitors and customers of Ethylene glycols.  
102  Responses to question 9 of Q2 - Questionnaire t o competitors and customers of Ethylene glycols.  
103  Responses to questions 10.1 and 10.2 of Q2 - Questionnaire to competitors and customers of Ethylene 
glycols.  

 
 
25 The Commission’s assessment  
(88) As outlined in paragraph (85) above, the Transaction only gives rise to horizontally 
affected possible markets  in the supply of EGs, MEG or DEG at worldwide level.  
(89) At worldwide level, the Parties’ combined market shares range between [20-30]% 
and [20-30]%, depending on whether EGs are considered as a whole or if the 
product market is segmented between MEG and DEG . Irrespective of the product 
market definition considered, the increment brought by Saudi Aramco is small ( [0-
5]% or less) and the HHI increment remains below 150.  
(90) The results of the market investigation broadly confirmed that the Notifying Party’s 
marke t share estimates are reliable and, in particular, that Saudi Aramco is a 
relatively small supplier of EGs, MEG and DEG worldwide.107 The majority of 
respondents confirmed that, post -Transaction, there will remain a number of strong 
competitors in the market  to constrain the combined entity, such as Shell, Sinopec, 
BASF, PIC, Lotte and Formosa and that customers will continue to have a sufficient 
choice of credible suppliers to meet their needs.108 Moreover, the majority of 
customers responding to the market in vestigation confirmed that they typically 
procure EGs from multiple suppliers, can switch relatively easily, and have switched 
supplier in the last 3 years.109 The majority of respondents considered that it is 
relatively easy for an existing supplier to expa nd its sales of EGs or begin selling in 
a new location.110 Finally, the majority of respondents to the market investigation 
did not consider that the Transaction would have any negative impact on prices, 
quality, choice or innovation for the worldwide market  for EGs (or its sub -
segments). In addition, no material concerns were raised regarding the Parties’ 
horizontal overlap in EGs.111 
(91) In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the C ommission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the market for EGs, regardless of whether the relevant geographic market is 
considered EEA -wide or worldwide or if the pr oduct market is EGs or sub -
segmented between MEG, DEG and TEG.  
6.3.Ethylene propylene terpolymer rubber and ethylene propylene co -polymer 
(together, “EP(D)M”)  
6.3.1.  Market definition  
(92) Ethylene propylene terpolymer rubber (“EPDM”) is a synthetic rubber obtained by 
polymerisation of ethylene and propylene in the presence of a diene component.  
                                                 
107  Responses to questions 13 and 14 of Q2 - Questionnaire to competitors and customers of Ethylene 
glycols . 
108  Responses to questions 12, 13 and 20 of Q2 - Questionnaire to competitor s and customers of Ethylene 
glycols . 
109  Responses to questions 16 and 17 of Q2 - Questionnaire to competitors and customers of Ethylene 
glycols . 
110  Responses to question 19 of Q2 - Questionnaire to competitors and customers of Ethylene glycols . 
111  Responses to questions 22 and 23 of Q2 - Questionnaire to competitors and customers of Ethylene 
glycols . 
 
 
26 (93) The ethylene -propylene elastomer family also comprises another type of rubber, 
which is ethylene propylene co -polymer (“EPM”). EPDM accounts for about 85% of 
the total world pro duction of EP(D)M and EPM accounts for the remaining 15%. 
For the purposes of this Decision, EPDM and EPM will be referred to jointly as 
“EP(D)M”.  
(94) Owing to its resistance to ozone, aging, weather, and high temperatures, EP(D)M 
has multiple uses in the auto motive industry, such as the manufacture of sealing 
systems, radiator hoses, brake parts, belts, as well as other rubber -moulded goods. 
EP(D)M is also blended with other polymers in order to improve their physical 
properties, such as impact and chemical re sistance. Finally, EP(D)M is used in the 
construction industry for the waterproofing of roofs, window -seals and facades, in 
oil additives (mainly EPM), as well in various rubber goods, such as soccer balls.  
6.3.1.1.  Product market definition  
The Commission’s prec edents  
(95) In Dow/DDE , the Commission identified a potential separate product market for 
EPDM.112 Moreover, in Dow/DuPont , the Commission had defined product markets 
for synthetic elastomers according to their chemical composition.113  
The Notifying Party’s view  
(96) The Notifying Party submits that EPDM and EPM should be considered as part of 
the same relevant product market, given that (i) EPM and EPDM exhibit common 
properties, and are largely substitutable from a demand -side perspective, (ii) the two 
products are m anufactured on the same production lines, and switching between the 
two is possible in a timely and cost -effective manner, suggesting a strong supply -
side substitutability between the two products, and (iii) EPDM is estimated to 
account for about 85% of th e total world production of EP(D)M .114   
The Commission’s assessment  
(97) The majority of respondents to the market investigation indicated that EPDM is not 
substitutable with other products due to its specific characteristics.115 This likely 
includes EPM, with whi ch EPDM is substitutable only for certain applications.116 
Furthermore, the majority of the demand for EP(D)M is from the automotive 
industry, which requires a number of approvals to meet safety and performance 
standards, making EP(D)M difficult to substitut e for customers.117  
(98) In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for EP(D)M can be left 
                                                 
112  See case COMP/M.3733 - Dow/DDE , decision of 26.04.2005.  
113  See case IV/M.663 - Dow/DuPont , decision of 21.02.1996.  
114  Form CO, paragraphs 680 -683. 
115  Responses to question 3 for Q4 - Questionnaire for competitors and customers of Ethylene propylene 
terpolymer rubber (EPDM) . 
116  Responses to question 3 for Q4 - Questionnaire for competitors and customers of Ethylene propylene 
terpolymer rubber (EPDM) . 
117  Responses to question 17 for Q4 - Questionnaire for competitors and customers of Ethylene propylene 
terpolymer rubber (EPDM) . 
 
 
27 open, since the Transaction does not raise serious doubts as to its compatibil ity with 
the internal market, under any plausible product market definition (i.e. EP(D)M 
overall, or segmented between EPDM and EPM).  
6.3.1.2.  Geographic market definition  
The Commission’s precedents  
(99) In cases involving synthetic elastomers, the Commission has previously considered 
that the relevant geographic market could be at least EEA -wide, and probably larger, 
though it ultimately left open the precise geographic market definition.118  
The Notifying Party’s view  
(100)  The Notifying Party considers that the geographic market for EP(D)M is global or at 
least EEA -wide in scope, as EP(D)M is traded globally, with significant imports and 
exports between continents.119 Moreover,  the Notifying Party points out that major 
EP(D)M manufacturers’ production facilities are able to serve customers around the 
globe. Further, the Notifying Party emphasises that the main customers for EP(D)M 
are global automotive players and compounders, with enough sophistication to easily 
switch between suppliers and procure EP(D)M from suppliers located in different 
regions across the globe.  Lastly, the Notifying Party considers that neither 
transportation costs, nor import duties constitute significant barriers to trading 
EP(D)M across reg ions. 
The Commission’s assessment  
(101)  All respondents to the market investigation considered that the relevant geographic 
market for EP(D)M is worldwide.120 Respondents to the market investigation 
considered that suppliers with plants located outside the EEA cou ld credibly supply 
customers located in the EEA, and a majority of them expressed that they already 
did so. Respondents also pointed  to the lack of significant barriers to purchasing 
worldwide.121 
(102)  In any event, the Commission considers that, for the purpose s of the present 
Decision, the exact scope of the geographic market definition for EP(D)M, EPDM, 
or EPM can be left open, since the Transaction does not raise serious doubts as to its 
compatibility with the internal market, under any plausible geographic m arket 
definition (i.e. EEA -wide or worldwide).  
                                                 
118  See cases IV/M.663 - Dow/DuPont , decision of 21.02.1996 and COMP/M.3733 - Dow/DDE , decision 
of 26.04.2005. In case COMP/M.373 3 - Dow/DDE , even though EPDM was defined as a separate 
product market, the Commission did not define the geographic market for EPDM, since this product 
was not affected under any plausible geographic market.   
119  Form CO, paragraphs 684 -688. 
120  Responses to question 5 for Q4 - Questionnaire for competitors and customers of Ethylene propylene 
terpolymer rubber (EPDM) . 
121  Responses to questions 6, 7 and 9 for Q4 - Questionnaire for competitors and customers of Ethylene 
propylene terpolymer rubber (EPDM) . 

 
 
29 EPDM.122 In particular, the Notifying Party submits that the market share increment 
brought by SABIC is de minimis  (below [0-5]%), and that the Parties are not close 
competitors for EP(D)M, including because Saudi Aramco is a well -established 
global supplier while SABIC is a new and fringe supplier with small capacity. The 
Notifying Party adds that SABIC is not a maverick entr ant that could disrupt the 
segment, given that EP(D)M is a commodity product and that SABIC’s product and 
production methods are the same as those of its competitors. Moreover, the 
Notifying Party submits that the combined entity would continue, post -Trans action, 
to face competition from a number of strong, well -established competitors, such as 
ENI, ExxonMobil and DowDuPont, with respective market shares in 2018 of [20-
30]%, [10-20]% and [10-20]%123, as well as from other smaller players. Lastly, the 
Notifying Party considers that the barriers to enter the EP(D)M business are 
minimal, and that the Parties’ largest customers, who are global automotive 
manufacturers and suppliers, have significant buyer power.  
The Commission’s assessment  
(111)  As outlined in p aragraph (107)  above, the Transaction only gives rise to a 
horizontally affected market in the supply of EP(D)M and EPDM in the EEA.  
(112)  The results of the market investigation broadly confirmed that the Notifying Party’s 
market share estimates are reliable.124 The Parties’ combined market share for 
EP(D)M in the EEA was therefore around [20-30]%  in 2018.  
(113)  Regarding potential non -coordinated effects, the Co mmission notes that the 
increment brought by SABIC is small (below [0-5]%), and the HHI increment 
remains below 150. Likewise, on a narrower segmentation for EPDM, the Parties’ 
combined market share remains modest, at [20-30]% . 
(114)  In addition, the results of the market investigation broadly indicated that the Parties 
are not each other’s closest competitors for EP(D)M in the EEA. While Saudi 
Aramco is firmly ranked among top suppliers such as ENI or Kumho, SABIC is 
considered by respondents to the market inves tigation to be a lesser competitor in 
this market. This holds true in a narrower segment for EPDM as well.125 Even 
though the majority of suppliers expressed that entering or expanding into the 
market for the supply of EP(D)M in the EEA could be challenging,  the majority of 
customers confirmed that, post -Transaction, they expected that there will remain a 
sufficient pool of credible suppliers to meet their needs.126 Moreover, the majority of 
customers responding to the market investigation confirmed that they t ypically 
procure EP(D)M from a variety of suppliers, and, even though they have expressed 
that switching can be difficult given the need to qualify suppliers of EP(D)M, a large 
                                                 
122  Form CO, paragraphs 689 -746. 
123  Source: Notifying Party’s estimates.  
124  Responses to questions 11, 12 and 13 of Q4 - Questionnaire for competitors and customers of Ethylene 
propylene terpolymer rubber (EPDM) . 
125  Responses to questions 11, 12 and 13 of Q4 - Questionnaire for competitors and customers of Ethylene 
propylene terpolymer rubber (EPDM) . 
126  Responses to questions 17, 18 and 19 of Q4 - Questionnaire for competitors and customers of Ethylene 
propylene terpolymer rubber (EPDM) . 
 
 
30 majority expressed that they had in fact switched suppliers over the last 3 yea rs.127 
Lastly, the majority of respondents to the market investigation did not consider that 
the Transaction would have any negative impact on prices, quality, choice or 
innovation for the EEA market for EP(D)M (nor for EPDM separately) and no 
material conce rns were raised regarding the Parties’ horizontal overlap for these 
products.128 
(115)  Regarding potential coordinated effects, while the three largest competitors (Saudi 
Aramco, ExxonMobil and ENI) appear to have similar market shares in the supply 
of EP(D)M in t he EEA ( [10-20]-[20-30]%), this market does not appear to be 
concentrated. The HHI for the market for EP(D)M in the EEA will indeed remain 
below 1650 post -Transaction and the market investigation confirmed that there are a 
number of smaller, but credible c ompetitors outside these top three suppliers, such as 
DowDupont, Lion Chem Capital and Kumho.129 Moreover, because SABIC only 
accounts for a share of [0-5]% of the market , the mere reduction in the number of 
firms in the market for EP(D)M in the EEA  (through  the loss of SABIC as a 
competitor) does not appear to be a factor that facilitates coordination . In light of 
these elements, as well as the evidence available to it, the Commission considers that 
the Transaction does not raise serious doubts as to its com patibility with the internal 
market in relation to potential coordinated effects in the market of EP(D)M in the 
EEA.130 
(116)   In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the market for EP(D)M, regardless of whether the relevant product market is 
considered to be EP(D)M or  EPDM.  
6.4. Polyethylene  
6.4.1.  Market definition  
(117)  Polyethylene is a thermoplastic obtained through the polymerisation of ethylene, 
either alone or with a co -monomer, such as butene, hexene or propene. It is one of 
the most commonly used plastics; polyethylene resins are used in a wide array of 
applications, including films, coatings, packaging, bags, plastic pipes, bottles and 
various moulded plastic products. There are three main categories of polyethylene: 
high density polyethylene (“HDPE”), low density polyethylene (“LDPE”) and linear 
low den sity polyethylene (“LLDPE”).  
                                                 
127  Responses to questio ns 14, 15 and 16 of Q4 - Questionnaire for competitors and customers of Ethylene 
propylene terpolymer rubber (EPDM) . 
128  Responses to questions 20 and 21 of Q4 - Questionnaire for competitors and customers of Ethylene 
propylene terpolymer rubber (EPDM) . 
129  Responses to questions 11, 12 and 13 of Q4 - Questionnaire for competitors and customers of Ethylene 
propylene terpolymer rubber (EPDM) . 
130  For completeness, the Transaction would create a structural link between Saudi Aramco and 
ExxonMobil through the Kem ya JV. However, as outlined in paragraph (61) in relation to butyl rubber, 
this structural link is not likely to increase the likelihood that Saudi Aramco and ExxonMobil can reach 
terms of coordination, as neither JV partner receives commercially sensitive information about the 
other. Moreover, ENI ( the second largest player) is not a party to the JV.  
 
 
31 (118)  HDPE  is manufactured by low pressure processes and is a stiff product with good 
chemical resistance and low permeability to gases and vapours due to its high 
density. It is mainly used in the manufacture of drain pipes, rigid containers (e.g. 
milk jugs, deterg ent bottles), toys and large blow mouldings (drums, automotive fuel 
tanks, large pipes).  
(119)  LDPE  is manufactured by high pressure processes and is a more flexible product 
than HDPE, while still being crack resistant and having good water and gas 
resistance. It is used to produce more flexible plastic products, mainly films and 
coatings, as well as car bumpers, garden hoses and grocery bags.  
(120)  LLDPE  was developed as a low -pressure manufacturing alternative to the high 
pressure LDPE process. It is stretchable and  flexible, but is also resistant to high 
impact and puncture damage. LLDPE is principally used in film or packaging 
applications as well as in injection or roto -moulded articles, membranes and pipes. 
Within the LLDPE family, there are three main types depe nding on the co -monomer 
used in the manufacturing process: “C4 LLDPE”, which uses butene as co -
monomer, “C6 LLDPE”, which uses hexene as co -monomer and “C8 LLDPE”, 
which uses octene as co -monomer.  
6.4.1.1.  Product market definition  
The Commission’s precedents  
(121)  The Commission has considered the market for polyethylene and its potential sub -
segments in previous decisions.131 The Commission considered that HDPE 
constitutes a relevant market separate from LDPE and LLDPE in light of differences 
in the production methods, performance characteristics and end uses.132 The 
Commission has also found that C8 LLDPE forms part of a separate relevant product 
market from LDPE as well as from other types of LLDPE (i.e. from C4 and C6 
LLDPE).133 However, the Commission has left open wheth er there is a single 
relevant product market for LDPE, C4 LLDPE and C6 LLDPE, or whether LDPE 
forms part of a separate relevant product market from C4 LLDPE and C6 LLDPE 
(together).134 
The Notifying Party’s view  
(122)  The Notifying Party considers that polyethylen e could either be considered a single 
relevant product market or that it could be segmented between HDPE, LDPE and 
LLDPE.135  
                                                 
131  See case COMP/M.1671 - Dow Chemical/Union Carbicide , decision of 3.05.2000. See also cases 
COMP/M.2345 - Deutsche BP/  Erdölchemie , decision of 26.04.2001, COMP/M.2806 SABIC/DSM 
Petrochemicals,  decisi on of 18.06.2002, COMP/M.4426 SABIC/Huntsman , decision of 20.12.2006, 
COMP/M.4744 INEOS/Borealis , decision of 24.08.2007, COMP/M.7465 - Arkema/Bostik , decision of 
28.01.2015.  
132  See case COMP/M.1671 - Dow Chemical/Union Carbicide , decision of 3.05.2000 and  case 
COMP/M.708 Exxon/DSM , decision of 15.10.1996.  
133  See case COMP/M.1671 - Dow Chemical/Union Carbicide , decision of 3.05.2000.  
134  See cases COMP/M.2345 - Deutsche BP/  Erdölchemie , decision of 26.04.2001, COMP/M.2806 
SABIC/DSM Petrochemicals,  decision o f 18.06.2002.  
135  Form CO, paragraphs 143 -145. 
 
 
32 The Commission’s assessment  
(123)  The majority of respondents to the market investigation confirmed that polyethylene 
is not substitutable  with other products in light of its product characteristics, 
explaining that for a number of applications polyethylene cannot be substituted with 
other materials without significant, costly and long -term changes to customers’ 
production processes.136 The ma jority of respondents confirmed that HDPE has 
different characteristics from LDPE and LLDPE, and so cannot be used as a 
substitute to them. The majority of respondents further indicated that substitutability 
between LDPE and LLDPE is limited as their diffe rent properties (such as different 
levels of resistance to heat) make them more suitable for different end 
applications.137 
(124)  The results of the market investigation indicated that LLDPE could be further 
segmented between C4, C6 and C8 LLDPE, with the caveat t hat C4 LLDPE and C6 
LLDPE could be substitutable to an extent depending on the end use application.138 
It was noted that there are price differences between the three products, that 
customers may need to change their processes for manufacturing the end produ cts to 
switch between C4, C6 and C8 LLDPE, and that it is not straightforward for 
suppliers to switch production between them.  
(125)  In any event, the Commission considers that, for the purposes of this Decision, the 
exact scope of the product market definition  for polyethylene can be left open, since 
the Transaction does not raise serious doubts as to its compatibility with the internal 
market, under any plausible product market definition.  
6.4.1.2.  Geographic market definition  
The Commission’s precedents  
(126)  In previous  decisions, the Commission has considered the relevant geographic 
market for polyethylene and its potential sub -segments to be Western Europe or 
EEA-wide, and possibly global in scope.139 However, the Commission ultimately 
left the geographic market for poly ethylene and its potential sub -segments open.140 
                                                 
136  Responses to question 3 of Q5 - Questionnaire to competitors and customers of Polyethylene . 
137  Responses to questions 4 and 5 of Q5 - Questionnaire to competitors and customers of Polyethylene. 
Additionally , the majority of respondents did not consider LDPE to be substitutable with C4, C6 or C8 
LLDPE - see responses to question 6.3 of Q5 - Questionnaire to competitors and customers of 
Polyethylene . 
138  Responses to questions 6.1 and 6.2 of Q5 - Questionnaire to competitors and customers of 
Polyethylene . 
139  See cases COMP/M.4744 - INEOS/Borealis , decision of 24.08.2007, COMP/M.7465 - Arkema/Bostik , 
decision of 28.01.2015 and COMP/M.1671 - Dow Chemical/Union Carbicide , decision of 3.05.2000.  
140  See cases COMP/M.4744 - INEOS/Borealis , decision of 24.08.2007, COMP/M.7465 - Arkema/Bostik , 
decision of 28.01.2015 and COMP/M.1671 - Dow Chemical/Union Carbicide , decision of 3.05.2000.  
 
 
33 The Notifying Party’s view  
(127)  The Notifying Party submits that the geographic market for polyethylene and its sub -
segments is EEA -wide or global, noting that polyethylene is widely traded, that there 
are signific ant imports into Europe, and that there are limited barriers to trade.141 
The Commission’s assessment  
(128)  The market investigation indicated that the relevant geographic market for 
polyethylene (and its plausible sub -segments) is likely worldwide.142 Respondents 
pointed out that there are significant patterns of trade worldwide and that the same 
main suppliers are active worldwide.143 Competitors explained that they can readily 
supply EEA customers from their production facilities based outside the EEA.144 
Polyethylene  customers confirmed that they can and do source polyethylene from 
suppliers based outside the EEA for use in their facilities within the EEA.145 On the 
other hand, respondents identified that there are some barriers to trading worldwide, 
namely tariffs, tra nsport costs and long -lead times, though they emphasised that 
trade flows remain global.146 
(129)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for polyethylene can 
be lef t open, since the Transaction does not raise serious doubts as to its 
compatibility with the internal market, under any plausible geographic market 
definition (EEA or worldwide).  
6.4.2.  Competitive assessment  
(130)  Both Parties supply polyethylene (including HDPE, LDP E and C4, C6 and C8 
LLDPE) worldwide and in the EEA.  
(131)  At worldwide level, the Transaction does not give rise to any horizontally affected 
markets for polyethylene (or its plausible sub -segments).147  
(132)  In the EEA, the Transaction only gives rise to horizontall y affected markets if the 
following plausible product markets: (i) the supply of C4 LLDPE,148 (ii) the supply 
of C4 and C6 LLDPE, and (iii) the supply of LDPE, C4 and C6 LLDPE.  
                                                 
141  Form CO, paragraphs 146 -149.  
142  The market investigation strongly  indicated that a market limited to Western Europe would not be 
appropriate for polyethylene or any of its sub -segments for the purposes of the present Decision, so it is  
not considered further in this Decision.  
143  Responses to question 7 of Q5 - Questionn aire to competitors and customers of Polyethylene . 
144  Responses to question 8 of Q5 - Questionnaire to competitors and customers of Polyethylene  
145  Responses to question 9 of Q5 - Questionnaire to competitors and customers of Polyethylene . 
146  Responses to question 10 of Q5 - Questionnaire to competitors and customers of Polyethylene . 
147  For completeness, the Notifying Party estimates that the Parties’ combined worldwide market share in 
the supply of polyethylene was [5-10]% in 2018 (by volume) and that thei r combined market share 
would not exceed 20% under any plausible sub -segmentation at worldwide level. The Notifying Party 
also estimates that the Parties’ combined market share in the EEA would be [10-20]%  for polyethylene, 
and would only exceed 20% in the  sub-segmentations listed in the paragraph.  
148  There is no affected market in relation to C6 LLDPE as the Parties’ market shares are only [5-10]% in 
the EEA in 2018.  

 
 
35 part of the relevant product market. The increment brought by Saudi Aramco is 
small ( [0-5]% or less) and the HHI increment remains below 150. If the market is 
further segmented and only consider ed to be C4 LLDPE alone, the combined market 
share would amount to [30-40]%, the increment brought by Saudi Aramco would be 
[0-5]% and the HHI increment would be 256, in the context of a relatively 
fragmented market, where the HHI post -Transaction would re main below 2250.  
(137)  The results of the market investigation broadly confirmed that the Notifying Party’s 
market share estimates are reliable and, in particular, that Saudi Aramco is a 
relatively small supplier of C4 and C6 LLDPE, as well as LDPE, in the EEA.150 The 
majority of respondents confirmed that, post -Transaction, there will remain a 
number of strong competitors in the market to constrain the combined entity, such as 
DowDuPont,151 ExxonMobil, INEOS, ENI and Total (as well as major global 
players such as S inopec) and that customers will continue to have a sufficient choice 
of credible suppliers to meet their needs.152 Moreover, the majority of customers 
responding to the market investigation confirmed that they typically procure C4 and 
C6 LLDPE, as well as LD PE, from multiple suppliers, can switch relatively easily 
and have switched supplier in the last 3 years.153 The majority of respondents 
considered that it is relatively straightforward for an existing supplier to expand its 
sales of these products or to sta rt selling them in a new country.154 Finally, the 
majority of respondents to the market investigation did not consider that the 
Transaction would have any negative impact on prices, quality, choice or innovation 
for the EEA market for polyethylene (or its su b-segments) and no material concerns 
were raised regarding the Parties’ horizontal overlap in relation to polyethylene or 
these sub -segments thereof.155 
(138)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the market for polyethylene or its plausible sub -segments described above, 
regardless of whether th e relevant geographic market is considered EEA -wide or 
worldwide, and of the product market definition adopted.  
6.5. Polypropylene resins (PP resins)  
6.5.1.  Market definition  
(139)  Polypropylene resins (“PP resins”) are thermoplastic polymers obtained by 
polymerisation of propylene, either alone or with a co -monomer, such as ethylene. 
They are low -cost commodity products, used in high volumes. PP resins are tough, 
flexible, lightweig ht and heat resistant. They are used in plastic applications, which 
                                                 
150  Responses to questions 11, 13 and 14 of Q5 - Questionn aire to competitors and customers of 
Polyethylene . 
151  As of June 1st, 2019, DowDuPont was separated into three independent companies (Dow, Dupont and 
Corteva). DowDuPont’s performance plastics division remained within Dow.  
152  Responses to questions 12, 13 and 20 of Q5 - Questionnaire to competitors and customers of 
Polyethylene . 
153  Responses to questions 16, 17 and 18 of Q5 - Questionnaire to competitors and customers of 
Polyethylene . 
154  Responses to question 19 of Q5 - Questionnaire to competitors and cust omers of Polyethylene . 
155  Responses to question 21 of Q5 - Questionnaire to competitors and customers of Polyethylene . 
 
 
36 include reusable containers, stationery, laboratory materials and packaging, among 
others.  
6.5.1.1.  Product market definition  
The Commission’s precedents  
(140)  In previous decisions, the Commission has considered whether the market for PP 
resins should be segmented between (i) homopolymers, (ii) impact (block) co -
polymers and (iii) random co -polymers, but it has always left the exact product 
market definition open.156 
The Notifying Party’s view  
(141)  The Not ifying Party submits that PP resins should be considered as a single relevant 
product market.157  
The Commission’s assessment  
(142)  The majority of respondents to the market investigation indicated that PP resins 
overall are not substitutable with other products a nd that, within PP resins, each type 
(i.e. homopolymer, impact (block) co -polymers and random co -polymers) is not 
substitutable with one another or with other products given the special properties 
that each type confers to the end product.158 Moreover, the m ajority of respondents 
indicated that no further sub -division of the three types of PP resins is necessary.159 
(143)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for PP resi ns can be left 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible product market definition (i.e. an overall 
market for PP resins, or sub -segments for homopolymers, impact (block)  co-
polymers and random co -polymers).  
6.5.1.2.  Geographic market definition  
The Commission’s precedents  
(144)  The Commission has previously left open whether the geographic market for PP 
resins was Western Europe, EEA -wide or global.160 
                                                 
156  See c ases COMP/M.8877 - LyondellBasell Industries/A Schulman , decision of 27.06.2018, 
COMP/M.4744 - Ineos/Borealis , decision of 24.08. 2007, COMP/M.4426 - SABIC/Huntsman 
Petrochemicals UK , decision of 20.12.2006.  
157  Form CO, paragraphs 373 -374. 
158  Responses to questions 3 and 4 of Q6 - Questionnaire to competitors and customers of Polypropylene 
resins . 
159  Responses to question 5 of Q6 - Questionnaire to competitors and customers of Polypropylene resins . 
160  See c ases COMP/M.8877 - LyondellBasell Industries/A Schulman , decision of 27.06.2018, 
COMP/M.4744 - Ineos/Borealis , 24.08.2007, COMP/M.4426 - SABIC/Huntsman Petrochemicals UK , 
20.12.200 6. 
 
 
37 The Notifying Party’s view  
(145)  The Not ifying Party submits that the geographic market for PP resins and its sub -
segments is global or at least EEA -wide in scope, given the lack of trade barriers 
globally and in the EEA, the fact that PP resins are commodity products, and the fact 
that they can  be easily transported for little cost (i.e. transport costs represent less 
than 5% of the product’s total cost).161 
The Commission’s assessment  
(146)  The market investigation strongly indicated that the relevant geographic market for 
PP resins, as well as each of  its sub -types, is likely worldwide or at least EEA -wide 
in scope.162 The majority of respondents indicated that within the EEA there existed 
no major barriers to trading PP resins.163 At worldwide level, the market 
investigation pointed to the existence of in ter-regional product flows, which have 
been growing steadily for a number of years, customers’ willingness to source 
globally, and customer’s perception that suppliers located outside the EEA can 
credibly and competitively sell PP resins to customers in th e EEA.164  
(147)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for PP resins can be 
left open between EEA and worldwide, since the Transaction does not raise serious 
doubts as to its compatibility with the internal market, under any plausible 
geographic market definition (EEA or worldwide).  
6.5.2.  Competitive assessment  
(148)  Both Parties supply PP resins, including its three main types, worldwide, although 
Saudi Aramco is a much smaller supplier than SABIC.  The markets for PP resins 
(generally), homopolymers, and random co -polymers are not affected at any 
plausible geographic level.165 In relation to PP resins, the Transaction only gives rise 
to a horizontally affected market in the  supply of impact (block) co -polymers in the 
EEA. The Transaction does not gives rise to an affected market for impact (block) 
co-polymers at worldwide level.  
                                                 
161  Form CO, paragraphs 377 -378. 
162  The market  investigation strongly indicated that a market limited to Western Europe would not be 
appropriate for PP resins or any of its sub -segments for the purposes of the present Decision, so it is not 
considered further in this Decision.  
163  Responses Responses t o question 10 of Q6 - Questionnaire to competitors and customers of 
Polypropylene resins .  
164  Responses to questions 7 and 9 of Q6 - Questionnaire to competitors and customers of Polypropylene 
resins . 
165  The Parties’ combined market shares are, in PP resin s (generally), [ 5-10]%  at worldwide level and [10-
20]%  in the EEA; in homopolymers, [5-10]%  at worldwide level and [5-10]%  in the EEA; and in 
random co -polymers, without increment as Saudi Aramco is not active in the supply of random co -
polymers.  

 
 
39 remain a number of strong competitors in the market to compete with the combined 
entity, such as Borealis, INEOS, Total or LyondellBasell, and that customers will 
continue to have a sufficient choice of credible suppliers to meet their needs.169 
Indeed, a customer explained that “ all competitors have a wide and excellent 
product range, covering many application as well as a good global footprint. All run 
world scale plants and are economically able to compete easily  against 
SABIC/Saudi Aramco ”.170 Moreover, the majority of customers responding to the 
market investigation indicated that they typically procure impact (block) co -
polymers from multiple suppliers, can switch with relative ease and have in fact 
switched supp liers in the last 3 years.171 Finally, the majority of respondents to the 
market investigation  did not consider that the Transaction would have any negative 
impact on prices, quality, choice or innovation in the EEA market for impact (block) 
co-polymers and  no material concerns were raised regarding this horizontally 
affected market.172 
(153)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the market for PP resins, regardless of whether the market is considered EEA -wide 
or worldwide or segmented by type of resin (i.e. homopolymers, impact (block) co -
polymer s, and random co -polymers).  
6.6. Ethanolamines (“EOAs”)  
6.6.1.  Market definition  
(154)  EOAs  are colourless and viscous liquids, with an ammoniac smell. By controlling 
production parameters, manufacturers are able to obtain three main types of EOAs, 
namely mono -ethanolamine (“MEA”), di -ethanolamine (“DEA”) and tri -
ethanolamine (“TEA”). EOAs are p roduced from ethylene oxide and ammonia.  
(155)  MEA , DEA  and TEA  have applications in the production of lubricants, detergents, 
agricultural products, cement, and household and personal care products. They are 
also used as surfactants feedstock and as metal -working fluids.  
(156)  In particular, DEA  is used in the production of glyphosate herbicide, in the personal 
care and detergent industries and in the production of synthetic metalworking fluids. 
DEA also has applications in the removal of acid gases from refinery streams. More 
recently, DEA has been used as a raw material for the production of diethanol 
isopropanolamine, a chemical product used as a cement grinding additive.  
                                                 
169  Responses to questions 13, and 20 of Q6 - Questionnaire to competitors and customers of 
Polypropylene resins . 
170  Response to question 15.1 of Q6 - Questionnaire to competitors and customers of Polypropylene resins . 
171  Responses to questions 16, 17 and 18 of Q6 - Questionnaire to competitors and customers of 
Polypr opylene resins . 
172  Responses to questions 21 and 22 of Q6 - Questionnaire to competitors and customers of 
Polypropylene resins . 
 
 
40 6.6.1.1.  Product market definition  
The Commission’s precedents  
(157)  The Commission has in the past considered the market for EOAs and its potential 
sub-segments.173 While acknowledging that MEA, DEA and TEA are used in 
different applications for which they are not substitutable, the Commission also 
noted that these three products might be substitutable to some extent when used as 
solvents. On the supply -side, the Com mission noted that these three products are 
invariably produced together within the same production facilities, while pointing 
out that switching production between MEA, DEA and TEA can be difficult. The 
Commission ultimately left open whether EOAs constit utes a single product market 
or it should be further sub -segmented between MEA, DEA and TEA.  
The Notifying Party’s view  
(158)  The Notifying Party does not disagree with the Commission’s precedents, but 
considers that for the purposes of the present Decision, the  exact product market 
definition can be left open.174 
The Commission’s assessment  
(159)  The majority of respondents to the market investigation confirmed that EOAs are not 
substitutable with other products, explaining that EOAs are used in specific 
applications fo r which no substitute is available.175 Further, respondents indicated 
that the different types of EOA (i.e. MEA, DEA and TEA) are generally not 
substitutable with each other from a customer perspective in light of their different 
properties, noting, however,  that some applications might allow switching between 
these three products, though sometimes requiring different dosage to deliver the 
same outcome.176 The majority of respondents confirmed that no further 
segmentation is necessary beyond the segmentation be tween different types of EOA 
(i.e. MEA, DEA and TEA).177 
(160)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for EOAs can be left 
open, since the Transaction does not raise s erious doubts as to its compatibility with 
the internal market, under any plausible product market definition (i.e. as an overall 
EOAs market or segmented between MEA, DEA and TEA).  
6.6.1.2.  Geographic market definition  
The Commission’s precedents  
(161)  In the past, the Commission has considered the relevant geographic market for 
EOAs and its potential sub -segments to be at least EEA -wide, and possibly global in 
scope.178 However, while acknowledging that many arguments tend to support the 
                                                 
173  See case COMP/M.4005 - Ineos/Innovene , decision of 09.12.2005.  
174  Form CO, paragraphs 817 -818. 
175  Responses to question 3 of  Q3 - Questionnaire to competitors and customers of Di -ethanolamine . 
176  Responses to question 4 of Q3 - Questionnaire to competitors and customers of Di -ethanolamine . 
177  Responses to question 5 of Q3 - Questionnaire to competitors and customers of Di -ethan olamine . 
178  See case COMP/M.4005 - Ineos/Innovene , decision of 09.12.2005.  
 
 
41 global dimension of the EOAs m arket, the Commission ultimately left the 
geographic market for EOAs and its potential sub -segments open .  
 The Notifying Party’s view  
(162)  The Notifying Party does not disagree with the Commission’s precedents, but 
considers that for the purposes of the presen t Decision , the exact geographic market 
definition can be left open.179 
 The Commission’s assessment  
(163)  The market investigation indicated that the relevant geographic market for all types 
of EOAs is likely worldwide. As regards DEA specifically (as the only pl ausible 
EOA product market in which there is an affected market), respondents generally 
considered the market for DEA to be worldwide, pointing to significant trade flows 
globally.180 Customers responding to the market investigation confirmed that they 
can a nd do source DEA from suppliers based outside the EEA for use in their 
facilities within the EEA.181 A majority of respondents considered that there are no 
barriers to trading DEA at worldwide level, though some respondents identified that 
there are some log istic barriers, as well as obstacles, such as the availability and 
costs of inputs, that would not allow a potential manufacturer to supply DEA 
worldwide from any location.182 
(164)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for EOAs can be left 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible geographic market definition (EEA -wide or 
worldwide).  
6.6.2.  Competitive assessment  
(165)  At worldwide level, the Transaction does not give rise to any affected market, 
regardless of whether EOAs are considered as a single relevant market, or split 
between MEA, DEA and TEA.183  
(166)  At EEA level, the Transaction only g ives rise to an affected market if the relevant 
product market is considered to be DEA.184 
                                                 
179  Form CO, paragraphs 819 -822. 
180  Responses to question 6 of Q3 - Questionnaire to competitors and customers of Di -ethanolamine . 
181  Responses to question 8 of Q3 - Questionnaire to  competitors and customers of Di -ethanolamine . 
182  Responses to questions 9.1.2 of Q3 - Questionnaire to competitors and customers of Di -ethanolamine . 
183  The Parties’ (2018 volume) market share in EOAs at worldwide level was [10-20]% , with an increment 
of [5-10]%  from SABIC. If EOAs are sub -segmented, the Parties would have a combined market share 
of [10-20]%  in MEA (with a [ 0-5]% increment from SABIC), of [ 10-20]%  in DEA (with a [ 5-10]%  
increment from Saudi Aramco) and [10-20]%  in TEA (with a [ 0-5]% increme nt from SABIC).  
184  At EEA level, the Parties’ (2018 volume) market share in EOAs was [ 10-20]%  (with an [5-10]%  
increment from SABIC), in MEA it is [ 10-20]%  (with a [5-10]%  increment from SABIC) and in TEA it 
is [10-20]%  (with a [5-10]%  increment from Saudi  Aramco).  

 
 
43 continue to have a sufficient choice of credible suppliers to meet their needs in the 
EEA.188 Moreover, the majority of customers responding to the market investigation 
confirmed that they typically procure DEA from multiple suppliers, can switch fairly 
easily and have switched supplier in the last 3 years.189 The majority of respondents 
considered t hat it is was relatively straightforward for an existing supplier to expand 
its sales of DEA in the EEA.190 Finally, the majority of respondents to the market 
investigation did not consider that the Transaction would have any negative impact 
on prices, quali ty, choice or innovation for the EEA market for DEA and no material 
concerns were raised regarding the Parties’ horizontal overlap in DEA at EEA level.   
(172)  In light of the above, taking account of the results of the market investigation and of 
all the evidenc e available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the market for EOAs, regardless of whether the market is considered EEA -wide or 
worldwide or if t he product market is considered to be an overall EOAs market or 
sub-segmented between MEA, DEA and TEA.  
6.7. Pygas  
6.7.1.  Market definition  
(173)  Pygas (or pyrolysis gasoline) is a high octane mixture of aromatics, olefins and other 
hydrocarbons. It is a by -product of the production of ethylene and propylene and is 
used in the production of benzene and toluene.  
6.7.1.1.  Product market definition  
The Commi ssion’s precedents  
(174)  In previous decisions, the Commission has considered whether there is a distinct 
market for pygas (overall), or if there are separate markets for (i) untreated pygas, 
which is a very reactive material produced in the cracker by distillat ion, and (ii) 
treated pygas, which is treated with hydrogen to increase stability. Ultimately, the 
Commission left this question open.191  
The Notifying Party’s view  
(175)  The Notifying Party notes that untreated pygas has high reactivity and low stability 
and, as  a result, it is rarely sold to third parties, and is instead converted by the same 
producer into treated pygas.192 However, the Notifying Party does not disagree with 
the Commission’s precedents and submits that for the purposes of the present 
Decision the product market definition can be left open.  
                                                 
188  Responses to question 19 of Q3 - Questionnaire to competitors and customers of Di -ethanolamine . 
189  Responses to questions 15, 16 and 17 of Q3 - Questionnaire to competitors and customers of Di -
ethanolamine . 
190  Responses to question 18 of Q3 - Questionnaire to competitors and customers of Di -ethanolamine . 
191  See case COMP /M.4426 - SABIC/Huntsman Petrochemicals , decision of 20.12.2006. See also cases 
COMP/M.4734 - Ineos/Kerling , decision of 30.01.2008, COMP/M.4744 - Ineos/Borealis , decision of 
24.08.2007, COMP/M.4401 - Basell/Münchsmünster Cracker and Associated Assets , dec ision of 
21.12.2006, and COMP/M.4041, Basell / Craqueur de l’Aubette , decision of 22.12.2005.  
192  Form CO, paragraphs 983 -985. 
 
 
44 The Commission’s assessment  
(176)  The majority of respondents to the market investigation confirmed that pygas is not 
generally substitutable with other products, though some respondents pointed out 
that for particular  applications there may be a degree of substitutability with other 
chemical products (for example, toluene might be used as a gasoline blending 
component in place of pygas).193 Respondents to the market investigation generally 
considered that treated and unt reated pygas are substitutable, though some pointed 
out that treated and untreated pygas have different product qualities and that 
untreated pygas is usually processed into treated pygas on -site, rather than being sold 
on the merchant market.194 
(177)  In any event , the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for pygas can be left open, 
since the Transaction does not raise serious doubts as to its compatibility with the 
internal market, un der any plausible product market definition (i.e. pygas overall, or 
segmented between treated pygas and untreated pygas).  
6.7.1.2.  Geographic market definition  
The Commission’s precedents  
(178)  In previous decisions, the Commission has considered the relevant geographic 
market for pygas and its potential sub -segments to be Western Europe or EEA -
wide.195 However, the Commission ultimately left the geographic market for pygas 
and its potential sub -segments open.  
The Notifying Party’s view  
(179)  The Notifying Party submit s that the relevant geographic market for pygas is global 
or at least EEA -wide in scope.196 It submits that pygas is a commodity product and 
that there are no barriers to trading pygas globally or within the EEA. It notes that 
Saudi Aramco supplies pygas on a global basis.  
The Commission’s assessment  
(180)  Respondents to the market investigation considered the relevant geographic market 
for pygas to be at least EEA -wide, if not global, confirming that are there no material 
barriers to trading within the EEA or worldwide.197 Respondents noted that REACH 
authorisation may be required to supply pygas in the EEA, but did not consider this 
to be a material barrier to trading. Customers responding to the market investigation 
                                                 
193  Responses to question 3 of Q9 - Questionnaire to competitors and customers of Pygas . 
194  Responses to question 4 of Q9 - Questionnaire to competitors and customers of Pygas . 
195  See case COMP/M.4426 - SABIC/Huntsman Petrochemicals , decision of 20.12.2006. See also cases 
COMP/M.4734 - Ineos/Kerling , decision of 30.01.2008, COMP/M.4744 - Ineos/Borealis , decision of 
24.08.2007, COMP/M.4401 - Basell/Münchsmünster Cracker and Associated Assets , decision of 
21.12.2006, and COMP/M.4041, Basell / Craqueur de l’Aubette , decision of 22.12.2005.  
196  Form CO, paragraphs 986 -988. 
197  Responses to questions 6 and 9 of Q9 - Questionnaire to co mpetitors and customers of Pygas.  The 
market investigation strongly indicated that a market limited to Western Europe would not be 
appropriate for pygas or any of its sub -segments for the purposes of the present Decision, so it is not 
considered further in  this Decision.  

 
 
46 The Notifying Party’s view  
(185)  As shown in  Table 10 above, there is no affected market in relation to pygas in 2018. 
As regards 2017, the Notifying Party submits that the Parties’ combined shares are 
modest (less than [20-30]%), that Saudi Ar amco is not a supplier of pygas and only 
exceptionally made small sales in 2017, and that the combined entity will continue 
to face competition from a number of competitors in the EEA and worldwide, 
including LyondellBasell, DowDupont, ExxonMobil, Total an d ENI.202 Moreover, it 
submits that barriers to entry are low and that customers are large manufacturers 
with significant buyer power and the ability to easily switch between suppliers. 
Therefore, the Notifying Party submits that the Transaction will not sig nificantly 
impede effective competition in relation to the horizontally affected market for 
pygas in the EEA.  
The Commission’s assessment  
(186)  As outlined in paragraph (183)  above, the Transaction would only give rise to 
horizontally affected markets in the supply of pygas in the EEA on the basis of Saudi 
Aramco’s exceptional sales in 2017.  
(187)  The Notifying Party estimates that the Parties’ combined market share in the supply 
of pygas in the EEA was [20-30]% in 2017. The increment brought by Saudi 
Aramco is small ( [0-5]%) and the HHI increment remains below 150.  
(188)  The results of the market invest igation broadly confirmed that the Notifying Party’s 
market share estimates are reliable and, in particular, that Saudi Aramco is a 
negligible supplier of pygas in the EEA.203 The majority of respondents confirmed 
that, post -Transaction, there will remain a number of strong competitors on the 
market to constrain the combined entity, such as LyondellBasell, Dow, BASF, 
INEOS and Total and that customers will continue to have a sufficient choice of 
credible suppliers to meet their needs.204 The respondents did not  consider SABIC 
and Saudi Aramco to be close competitors for the supply of pygas.205 Moreover, the 
majority of customers responding to the market investigation confirmed that they 
typically procure pygas from multiple suppliers, can switch relatively easily and 
have switched suppliers in the last 3 years.206 The majority of respondents 
considered that it is relatively straightforward for an existing supplier to expand its 
sales of pygas or begin selling in a new country.207 Finally, the majority of 
respondents to  the market investigation did not consider that the Transaction would 
have any negative impact on prices, quality, choice or innovation for the EEA -wide 
market for pygas (or its sub -segments) and no material concerns were raised 
regarding pygas.208 
                                                 
202  Form CO, paragraphs 993 -1012.  
203  Responses to questions 13 and 14 of Q9 - Questionnaire to competitors and customers of Pygas . 
204  Responses to questions 10, 11, 12 and 19 of Q9 - Questionnaire to competitors and customers of Pygas . 
205  Responses to ques tion 14 of Q9 - Questionnaire to competitors and customers of Pygas . 
206  Responses to questions 15 and 16 of Q9 - Questionnaire to competitors and customers of Pygas . 
207  Responses to question 18 of Q9 - Questionnaire to competitors and customers of Pygas . 
208  Responses to question 20 of Q9 - Questionnaire to competitors and customers of Pygas . 
 
 
47 (189)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the market for pygas, regardless of whether the market is considered EEA -wide or 
worldwide or segmented between treated and untreated pygas.  
6.8. Tailgas  
6.8.1.  Market definition  
(190)  Tailgas is a flammable gas mixture containing combustible components as well as 
sulphur com ponents. It is produced as a by -product from the cracking of various 
feedstocks, such as LPG, naphta and natural gas liquids, and from the processing of 
crude oil. Tailgas can be used to start the furnaces of crackers or burned in an 
incineration unit.  Tailgas can also be called “ refinery fuelgas ”.209 
6.8.1.1.  Product market definition  
The Commission’s precedents  
(191)  The Commission has not previously considered the market definition for the 
production and sale of tailgas.  
The Notifying Party’s view  
(192)  The Notifying Party c onsiders that tailgas could be considered as a separate relevant 
product market, but submits that, for the purposes of the case at hand, the exact 
product market definition can be left open as the Transaction would not lead to 
competitive concerns regardle ss of the precise market definition.210 
The Commission’s assessment  
(193)  The results of the market investigation were not conclusive as to whether tailgas is 
substitutable with other products.211 However, the responses to the market 
investigation indicated that there are no further subcategories of tailgas,212 and that 
consequently tailgas requires no further sub -segmentation.  
(194)  In any event, the Commission considers that, for the purposes of the pres ent 
Decision, the exact scope of the product market definition for tailgas can be left 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible product market definition.  
6.8.1.2.  Geographic ma rket definition  
The Commission’s precedents  
(195)  The Commission has not previously considered the geographic market definition for 
the production and sale of tailgas.  
                                                 
209  Email to the case team from a market participant dated 7 February 2020.  
210  Form CO, paragraphs 960 -961. 
211  Responses to question 3 of  Q8 - Questionnaire to competito rs and customers of Tailgas.  
212  Responses to question 4 of  Q8 - Questionnaire to competitors and customers of Tailgas . 
 
 
48 The Notifying Party’s view  
(196)  The Notifying Party considers that the geographic market is global  or at least EEA -
wide in scope, because there are no barriers to trading tailgas globally and especially 
within the EEA .213 The Notifying Party considers, however, that for the case at hand, 
the exact scope of the geographic market definition can be left ope n as the 
Transaction will not lead to competitive concerns regardless of the precise market 
definition.  
The Commission’s assessment  
(197)  The results of the market investigation were somewhat inconclusive, but indicate 
that the geographic market for tailgas may  be national, as wide as the relevant 
pipeline network, or EEA -wide. A market participant explained that gas streams 
require a pipeline network, which is typically national or regional.214 According to 
this respondent, there are technical barriers to purchas ing or selling tailgas at 
competitive terms at a worldwide level, because tailgas is transported via a gas 
stream and cannot be easily shipped.215 In addition, the market investigation 
indicated that tailgas customers located in the EEA source from within th e EEA and 
that only plants in the EEA can credibly supply tailgas customers located in the 
EEA.216 
(198)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for tailgas can be l eft 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible geographic market definition (national, as 
wide as the relevant pipeline network, EEA -wide, or even worldwide).  
6.8.2.  Competitive assessment  
(199)  While SABIC only sells tailgas in the EEA, all of Saudi Aramco’s sales were 
achieved outside the EEA, namely in the United States. Consequently, the Parties’ 
activities do not overlap when looking at the tailgas market within the EEA (at 
nation al or EEA level). The Parties would only overlap horizontally in the supply of 
tailgas to the extent that the market is considered worldwide. Although the market 
investigation suggested the relevant geographic market would likely be narrower 
than worldwide , as the results were somewhat inconclusive, this potential horizontal 
overlap on a worldwide market is assessed below for completeness.  
(200)  The Notifying Party does not provide market shares estimates for tailgas at 
worldwide level on the grounds that there is no reliable data regarding the total sales 
of tailgas worldwide. However, the Notifying Party provided the value of the sales 
generated by the Parties in 2018 for tailgas worldwide, which amounted to EUR […] 
for SABIC (exclusively in the EEA) and EUR […] for Saudi Aramco (exclusively in 
the United States).  
                                                 
213  Form CO, paragraphs 962 -963. 
214  Response to question 5 of Q8 - Questionnaire to competitors and customers of Tailgas . 
215  Response to question 8 of Q8 - Questionnaire to competitors and customers of Tailgas . 
216  Response to questions 6 -7 of Q8 - Questionnaire to competitors and customers of Tailgas . 
 
 
49 The Notifying Party’s view  
(201)  The Notifying Party submits that the Parties’ sales of tailgas are modest, and that 
they do not overlap in the EEA, since Saudi Aramco’s sales were generated only in 
the Unite d States .217 
The Commission’s assessment  
(202)  The market investigation did not provide sufficient information to enable the 
Commission to reconstruct the total market size or the Parties’ market shares for 
tailgas worldwide, which is the only geographic market definition on which the 
Parties overlap.218   
(203)  However, the market investigation indicated that the merchant market for tailgas is 
limited.219 Market respondents explained that tailgas is produced by refineries as a  
by-product, typically for internal consumptio n (i.e. captive use).220  
(204)  In addition, the market investigation indicated that, while entry and expansion for 
tailgas is rather difficult, because the production of tailgas requires a refinery,221 
sufficient credible suppliers will remain in the market post -Transaction, both in the 
EEA and at worldwide level.222  
(205)  No market respondent expects the Transaction to have a negative competitive impact 
in terms of price, quality, choice, or innovation on the tailgas market, be it EEA -
wide (or narrower) or worldwide.223 
(206)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the market for tailgas, regardless of whether the market is considered as national, as 
wide as the available pipeline network, EEA -wide or worldwide.  
6.9. Raffinate -2 
6.9.1.  Market definition  
(207)  Raffinate -2 is a colourless, highly flammable gas obtained as a by -product of the 
separation of isobutylene from raffinate -1. It consists of n -butene, butane and 
potentially residual butadiene. Raffinate -2 is mainly used for the manufacture of 
secondary bu tyl alcohol and methyl ethyl ketone. It also used as a heating gas in 
industrial facilities.  
 
                                                 
217  Form CO, paragraphs 964 -966. 
218  Responses to question 9 of Q8 - Questionnai re to competitors and customers of Tailgas . 
219  Responses to question 3.1 of Q8 - Questionnaire to competitors and customers of Tailgas . 
220  Responses to question 17 of Q8 - Questionnaire to competitors and customers of Tailgas . Email to the 
case team from a  market participant dated 7 February 2020.  
221  Responses to question 17 of Q8 - Questionnaire to competitors and customers of Tailgas  
222  Responses to question 18 of Q8 - Questionnaire to competitors and customers of Tailgas . 
223  Responses to question 18 of Q8 - Questionnaire to competitors and customers of Tailgas  
 
 
50 6.9.1.1.  Product market definition  
The Commission’s precedents  
(208)  The Commission has not previously considered the product market definition for the 
production and sale of raffinate -2.  
The Notifying Party’s view  
(209)  The Notifying Party submits that raffinate -2 should be considered as a separate 
relevant product market .224  
 The Commission’s assessment  
(210)  The majority of respondents to the market investigation indicated that raffinat e-2 is 
not substitutable with other products, and in particular it is not substitutable with its 
precursors in the naphtha cracking process (namely, crude C4 and raffinate -1).225  
The vast majority of respondents also confirmed that no further segmentation o f 
raffinate -2 is necessary.226  
(211)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for raffinate -2 can be left 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible product market definition.  
6.9.1.2.  Geographic market definition  
The Commission’s precedents  
(212)  The Commission has not previously considered the geographic market definition for 
the production and sale of raffinate -2.  
The Notifying Party’s view  
(213)  The Notifying Party submits that the geographic market for raffinate -2 is global or at 
least EEA -wide in s cope.227 The Notifying Party argues that the absence of trade 
barriers globally and especially within the EEA is the main reason why the 
geographic market for raffinate -2 should be considered to be global or at least EEA -
wide in scope.  
The Commission’s asse ssment  
(214)  The market investigation indicated that the relevant geographic market for raffinate -
2 is likely EEA -wide, or potentially worldwide. Most respondents consider the 
market for raffinate -2 to be EEA -wide, pointing to significant limitations to the 
transportation of the product, such as logistics and high transport costs due to the 
fact that raffinate -2 is a flammable gas that needs to be liquefied in order to be 
                                                 
224  Form CO, paragraphs 560 -561. 
225  Responses to question 3 of Q7 - Questionnaire to competitors and customers of Raffinate -2. 
226  Responses to question 4 of Q7 - Questionnaire to competitors and cust omers of Raffinate -2. 
227  Form CO, paragraphs 562 -563. 
 
 
51 transported.228 However, some customers indicated that some international trade 
flows exist be tween Europe and the USA.229  
(215)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for raffinate -2 can be 
left open, since the Transaction does not raise serious doubts as to its compatibility 
with the internal market, under any plausible geographic market definition (EEA -
wide or worldwide).  
6.9.2.  Competitive assessment  
(216)  SABIC only supplies raffinate -2 within the EEA. On the other hand, Saudi Aramco 
supplies raffinate -2 both withi n the EEA and worldwide. However, 99% of Saudi 
Aramco’s sales were achieved in North America and Asia (i.e. outside the EEA).   
(217)  The Notifying Party did not provide market shares estimate for raffinate -2 on the 
grounds that there is no reliable data regardi ng the size of the market in the EEA and 
worldwide. However, the Notifying Party provided the value of the sales of 
raffinate -2 generated by the Parties in 2018, which amounted to EUR […]for SABIC 
(exclusively in the EEA) and EUR […]for Saudi Aramco (out o f which EUR 
[…]was generated in the EEA).  
The Notifying Party’s view  
(218)  The Notifying Party claims that the Parties are not close competitors. This is mainly 
because they operate in different geographic areas, with SABIC being only present 
in the EEA, and Sau di Aramco only making around 1% of its sales of raffinate -2 in 
the EEA. Moreover the Notifying Party claims that SABIC’s sales in the EEA were 
made essentially to one customer.  
The Commission’s assessment  
(219)  Using the sales figures provided by the Notifying P arty and other market participants 
in response to the market investigation, the Commission was able to partially 
reconstruct the market, thus yielding some conservative estimates for the Parties’ 
market shares.230  
(220)  At EEA level, the data gathered allowed the  Commission to establish that the market 
for raffinate -2 would not be affected by the Transaction. The Parties’ combined 
market shares will remain below 20%, with a negligible increment of less than [0-
5]% from SABIC and a HHI increment below 150.  
(221)  At world wide level, the data gathered by the Commission did not suffice to confirm 
that raffinate -2 would not be a horizontally affected market. However, most 
respondents indicated that there are over 20 credible suppliers of raffinate -2 
worldwide.231 When asked to list the top five suppliers for raffinate -2 worldwide, 
none of the respondents mentioned Saudi Aramco, and only one mentioned SABIC, 
                                                 
228  Responses to questions 5 and 8 of Q7 - Questionnaire to competitors and customers of Raffinate -2. 
229  Responses to question 6 of Q7 - Questionnaire to competitors and customers of Raffinate -2. 
230  Responses to question 9 of Q7 - Questionnaire to competitors and customers of Raffinate -2. 
231  Responses to question 10 of Q7 - Questionnaire to competitors and customers of Raffinate -2. 
 
 
52 ranking it as number four supplier worldwide.232 None of the respondents identified 
the Parties as close competitors.233 A majo rity of respondents confirmed that 
customers will continue to have a sufficient choice of credible suppliers to meet their 
needs.234 Finally, all respondents to the market investigation consider that the 
Transaction would not have any negative impact on pric es, quality, choice or 
innovation in the worldwide market for raffinate -2 and no material concerns were 
raised regarding the Parties’ horizontal overlap in raffinate -2.235  
(222)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the market for raffinate -2, regardless of whether the market is considered EEA -wide 
or worldwide.  
6.10. Polybutadiene rubber (PBR)  
6.10.1.  Market definition  
(223)  PBR is an elastomer derived from the polymerisation of butadiene through a solution 
process. The tyre industry accounts for the majority of global PBR consumption. 
PBR is also used as an additive to improve the toughness of plastics such as 
polystyrene, in addition to other minor use s. Both Parties are active in the production 
and sale of PBR, primarily for the tyre application.  
6.10.1.1.  Product market definition  
The Commission’s precedents  
(224)  In Bayer/Hüls , the Commission identified a separate product market for PBR.236 
This distinction was reas serted in Wacker/Air products.  The Commission has 
previously also found that synthetic latex products should not be further divided into 
submarkets according to the grade qualities of the latex dispersions.237 
The Notifying Party’s view  
(225)  The Notifying Party a grees with the Commission’s precedents that PBR forms a 
separate product market.238 
The Commission’s assessment  
(226)  The vast majority of respondents to the market investigation confirmed that PBR is 
not substitutable with other products. Respondents explained th at even though some 
degree of substitutability might be attainable in certain applications, for the majority 
                                                 
232  Responses to question 11 of Q7 - Questionnaire to competitors and c ustomers of Raffinate -2. 
233  Responses to question 13 of Q7 - Questionnaire to competitors and customers of Raffinate -2. 
234  Responses to question 18 of Q7 - Questionnaire to competitors and customers of Raffinate -2. 
235  Responses to question 21 of Q7 - Quest ionnaire to competitors and customers of Raffinate -2. 
236  See case IV/M.751 - Bayer/Hüls , decision of 03.07.1996 and case IV/M.1097 - Wacker/Air products , 
decision of 04.08.1998.  
237  See cases M.5355 - BASF/CIBA , decision of 12.03.2009; M. 5424 - Dow/Rohm and  Haas , decision of 
08.01. 2009; and M.1993 - Rhodia/Raisio/ JV, decision of 20.07.2000.  
238  Form CO, paragraphs 497 -498 
 
 
53 of applications, and in particular for its main application in tyre manufacturing, PBR 
is not substitutable with other products.239 The majority of r espondents indicated that 
no further segmentation is necessary.240 While some respondents acknowledge that 
PBR exists in different grades, and can be produced using different types of catalysts 
for the polymerisation process, they also consider that these su b-types are usually 
substitutable with each other and price differences are minimal, so that these 
products should be considered as part of the same market.241  
(227)  The Commission considers that, for the purposes of the present Decision, and in line 
with previou s Commission decisions, PBR can be considered to form a single 
relevant product market.  
6.10.1.2.  Geographic market definition  
The Commission’s precedents  
(228)  The Commission has previously considered the relevant geographic market for all 
types of synthetic latex produ cts (including PBR) to be EEA -wide.242 In particular, 
the Commission pointed to differences in price levels between regions and the fact 
that the flow of supply between continents was not significant.  
The Notifying Party’s view  
(229)  The Notifying Party argues th at the  relevant geographic market for PBR is global or 
at least EEA -wide in scope.243 The Notifying Party submits that each major PBR 
manufacturer has a global presence and that this is also true of the major PBR 
customers, which are global tyre manufacturer s with worldwide presence. T he 
Notifying Party further explains that there are significant trade flows across regions, 
the top PBR manufacturers being located in the US, the EEA, South Korea, Russia 
and Japan. In addition, the Notifying Party claims that p roduction costs are roughly 
comparable between various worldwide production facilities and that neither 
transportation costs, nor import duties constitute significant barriers to trading PBR 
across regions.  
The Commission’s assessment  
(230)  The market investigat ion indicated that the relevant geographic market for PBR is 
likely worldwide or at least EEA -wide. Respondents generally considered the market 
for PBR to be worldwide, pointing to significant patterns of trade worldwide, such as 
exports from the EEA to As ia and America, as well as imports from China into the 
EEA and the USA, and the fact that PBR is a commodity product.244 Customers 
                                                 
239  Responses to question 33 of Q1 - Questionnaire to competitors and customers of Butyl rubber and 
Polybutadiene rubber.  
240  Responses to question 34 of Q1 - Questionnaire to competitors and customers of Butyl rubber and 
Polybutadiene rubber  
241  Responses to question 34 of Q1 - Questionnaire to competitors and customers of Butyl rubber and 
Polybutadiene rubber . 
242  See case case I V/M.751 - Bayer/Hüls , decision of 03.07.1996 and case IV/M.1097 - Wacker/Air 
products , decision of 04.08.1998.  
243  Form CO, paragraphs 499 -503. 
244  Responses to question 35 of Q1 - Questionnaire to competitors and customers of Butyl rubber and 
Polybutadiene rubber.  

 
 
55 (234)  The Transaction does not give rise to an affected market for PBR at worldwide or 
EEA levels on the basis of the most recently available market shares (i.e. 2018 
figures) .248 However, given that the Parties’ market shares appear to be close to th e 
20% threshold for a market to be considered as horizontally affected, the 
Commission has assessed this overlap on a conservative basis.  
The Notifying Party’s view  
(235)  According to the Notifying Party’s estimates, in the EEA  the Parties had a 
combined marke t share of [10-20]% in volume in 2018, with a limited increment of 
[0-5]% from SABIC and a HHI increment of <150.249 The Notifying Party submits 
that, on this market, the combined entity would continue to face competition from a 
number of strong competitors, such as NKNK ( [10-20]% ) and ENI ( [5-10]%), as 
well as other smaller players. The Notifying Party also submits that the Parties’ 
largest customers are global tyre manufacturers, with significant countervailing 
buying power, and the ability to easily switch between suppliers and procure PBR 
from suppliers located in other regions. Finally, the Notifying Party considers that, 
while Saudi Aramco is a well -established global supplier of PBR, SABIC is a new 
entrant on this market and is a fringe supplier, lacking  the production and 
distribution scale of its larger competitors. However, the Notifying Party adds that 
SABIC is not a maverick entrant that could disrupt the segment, given that PBR is a 
commodity product and that SABIC’s product and production methods a re the same 
as those of its competitors.  
The Commission’s assessment  
(236)  The results of the market investigation broadly confirmed that the Notifying Party’s 
market share estimates are reliable and, in particular, that SABIC is a relatively 
small supplier of P BR worldwide as well as in the EEA.250 The majority of 
respondents confirmed that, post -Transaction, there will remain a number of strong 
competitors on the market in the EEA to constrain the combined entity, such as ENI, 
NKNK, Sibur Petrochemicals, Synthos and Trinseo, and that customers will 
continue to have a sufficient choice of credible suppliers to meet their needs.251 
Moreover, the majority of customers responding to the market investigation 
confirmed that they typically procure PBR from multiple supplie rs, can switch 
relatively easily and have switched supplier in the last 3 years.252 The majority of 
respondents considered that it is relatively straightforward for an existing supplier to 
expand its sales of PBR or begin selling in a new country.253 Finally, the majority of 
respondents to the market investigation did not consider that the Transaction would 
                                                 
248  Form CO, paragraphs 504 -507. 
249  According to the Notifying Party’s estimates, the market shares of the Parties did not substantially 
differ in the past three years, and were even lower than in 2018, and market shares in value would not 
substantially differ from market shares in volume.  
250  Responses to questions 41.1, 41.2 and 42 of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene rubber.  
251  Responses to questions 43 and 48 of Q1 - Questionnaire to competitors and customers of Butyl rubber 
and Polybutadiene rubber.  
252  Responses to questions 44, 45 and 46 o f Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene rubber.  
253  Responses to question 47 of Q1 - Questionnaire to competitors and customers of Butyl rubber and 
Polybutadiene rubber.  
 
 
56 have any negative impact on prices, quality, choice or innovation in the market for 
PBR at EEA level, and no material concerns were raised regarding the Par ties’ 
horizontal overlap in PBR.254 
(237)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the market for PBR, regardless of whether the market is considered EEA -wide or 
worldwide.  
6.11. General conclusion of horizontal effects  
(238)  In light of the considerations set out in paragraphs (27) to (237) , and taking account 
of the results of the market investigation and of the evidence available to it, the 
Commission concludes that the Transaction does not raise serious doubts as to its 
compat ibility with the internal market with respect to non -coordinated and 
coordinated horizontal effects.  
7. VE RTICAL LINKS  – MARKE T DE FINITION AND  COMPE TITIVE ASSE SSM E NT 
7.1. Hydrogen (upstream) with hydrogenated nitrile butadiene rubber (HNBR) 
(downstream)  
7.1.1.  Market d efinitions  
7.1.1.1.  Hydrogen  
(239)  Hydrogen is one of the most widely used industrial gases, with applications in 
chemical, food, and glass production. Its principal use is for the synthesis of 
ammonia. It can be supplied both as a liquid and as a gas, and can be distributed via 
different channels (tonnage, bulk, and cylinders).  
7.1.1.1.1.  Product market definition  
The Commission’s precedents  
(240)  In previous decisions, the Commission has held that each industrial gas, including 
hydrogen, belongs to a separate product market bec ause of their different chemical 
and physical properties and because of the general lack of demand -side or supply -
side substitutability.255 In addition, it concluded that each distribution channel 
(tonnage, bulk and cylinders) forms a distinct relevant produ ct market.256  
                                                 
254  Responses to questions 49.1, 49.2 and 50  of Q1 - Questionnaire to competitors and customers of Butyl 
rubber and Polybutadiene rubber.  
255  See case COMP/ M.8480 - Praxair/Linde , decision of 28.08.2018, case COMP/M.1641 - Linde/AGA , 
decision of 9.02.2000, case COMP/M.3314 - Air Liquide/Messer Target s, decision of 15.03.2004.  
256  See case COMP/ M.8480 - Praxair/Linde , decision of 28.08.2018,  COMP/ M.1641 - Linde/AGA , 
decision of 9.02.2000 and case COMP/M.3314 - Air Liquide/Messer Targets , decision of 15.03.2004.  
 
 
57 The Notifying Party’s view  
(241)  The Notifying Party submits that it does not disagree with the Commission’s 
precedents.257  
The Commission’s assessment  
(242)  The majority of respondents to the market investigation confirmed that hydrogen is 
not substitutab le with other products, even though it might compete to an extent with 
other products (e.g. batteries, fuel) in emerging mobility applications.258 Further, 
respondents indicated that the different modes of delivery for hydrogen (i.e. tonnage, 
bulk and cylinders)  are not substitutable with each other from a customer perspective 
since they respond to distinct customer needs.259 The majority of respondents 
confirmed that no further segmentation is necessary beyond the segmentation 
between different modes of delivery of hydrogen.260 
(243)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for hydrogen can be left 
open, since the Transaction does not raise serious doubts as to its comp atibility with 
the internal market, under any plausible product market definition (i.e. as an overall 
hydrogen market or segmented between hydrogen supplied by  tonnage, bulk and 
cylinders ). 
7.1.1.1.2.  Geographic market definition  
The Commission’s precedents  
(244)  In previ ous decisions, the Commission considered that the geographic market for 
hydrogen supplied in tonnage was EEA -wide, whereas it was national for hydrogen 
supplied in bulk and in cylinder.261 
The Notifying Party’s view  
(245)  The Notifying Party submits that the geogr aphic market definition for the production 
and supply of hydrogen is global or at least EEA -wide in scope, given the lack of 
trade barriers globally and in particular within the EEA.  
The Commission’s assessment  
(246)  The market investigation confirmed the Commi ssion’s precedents that the 
geographic market for hydrogen supplied in tonnage is EEA -wide. Respondents to 
the market investigation indicated that global suppliers compete against each other 
for opportunities to supply tonnage hydrogen within the EEA and e ven to some 
extent at worldwide level. On the other hand, results of the market investigation 
indicated that the supply tonnage of hydrogen in the EEA requires a local presence 
in the EEA, for instance concerning maintenance organization and operating 
                                                 
257  Form CO, paragraphs 2397 -2406.  
258  Responses to question 3 of Q11 - Questionnaire to competitors and customers of Hydrogen.  
259  Responses to question 4 of Q11 - Questionnaire to competitors and customers of Hydrogen.  
260  Responses to question 5 of Q11 - Questionnaire to competitors and custom ers of Hydrogen.  
261  See cases COMP/ M.1641 - Linde/AGA , decision of 9.02.2000, COMP/M.3314 - Air Liquide/Messer 
Targets , decision of 15.03.2004 and Case COMP/M.4823 - Yara/Praxair , decision of 28.11.2007.  
 
 
58 structure. Regarding hydrogen supplied in cylinder, market respondents indicated 
that the geographic market remained national. Regarding hydrogen supplied in bulk, 
the results of the market investigation also pointed towards a national or EEA -wide 
market.262 Respondents indicated that it is possible to transport bulk hydrogen over 
several hundred kilometres, i.e. cross -borders.263 
(247)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definiti on for hydrogen can be 
left open, since the Transaction does not raise serious doubts as to its compatibility 
with the internal market, under any plausible geographic market definition.  
7.1.1.2.  Hydrogenated nitrile butadiene rubber (HNBR)  
7.1.1.2.1.  Product market definition  
(248)  Hydrogenated nitrile butadiene rubber (" HNBR ") is a synthetic rubber known for its 
physical strength and retention of properties after long -term exposure to heat, oil and 
chemicals. It is produced through selective hydrogenation of nitrile butadiene rubber 
in an organic solvent. The process can yield a number of different grades of HNBR 
with different acrylonitrile content, hydrogenation levels, and polymer viscosity. 
These properties and composition will render certain grades mor e suitable for 
different end -use applications.  
(249)  HNBR is used to produce dynamic and static seals, hoses, and belts for automotive 
applications, as well as rolls for steel and paper mills for industrial applications. It is 
also used in the food, pharmaceuti cal and medical industries.  
The Commission’s Precedents  
(250)  The Commission has not previously considered the product market definition for the 
production and sale of HNBR.  
The Notifying Party’s view  
(251)  The Notifying Party submits that all grades of HNBR are par t of a single product 
market. In the Notifying Party’s view, although there are multiple grades of HNBR 
available in the market, they all have the same key qualities, such as physical 
strength and retention of properties after long -term exposure to heat, o il, and 
chemicals.264 It also submits that there is a high -level of supply -side substitutability 
between the various grades of HNBR.  
The Commission’s assessment  
(252)  Despite providing examples of potential substitution between HNBR and other types 
of synthetic r ubber, the result of the market investigation indicated that it may be 
appropriate to define a separate product market for HNBR, though it was 
inconclusive on this point. In particular, the majority of respondents consider that no 
                                                 
262  Responses to question 6 of Q11 - Questionnaire t o competitors and customers of Hydrogen.  
263  Responses to questions 6, 7, 8 and 9 of Q11 - Questionnaire to competitors and customers of Hydrogen.  
264  Form CO, paragraphs 2454 -2460.  
 
 
59 further segmentation of t his product (by grade for instance) is relevant or 
necessary.265  
(253)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for HNBR can be left 
open, since the Transaction does no t raise serious doubts as to its compatibility with 
the internal market, under any plausible product market definition.  
7.1.1.2.2.  Geographic market definition  
The Commission’s precedents  
(254)  The Commission has not previously considered the geographic market definition for 
the production and sale of HNBR.  
The Notifying Party’s view  
(255)  The Notifying Party submits that the geographic market is global or at least EEA -
wide in scope, as the major suppliers are active across the principal economic 
regions of the world, operate on  a global basis, and transport costs remain low 
(below 5% of the sales price).266 
The Commission’s assessment  
(256)  The market investigation indicated that the relevant geographic market for HNBR is 
likely worldwide. Respondents generally considered the market for  HNBR to be 
worldwide, pointing to significant patterns of trade worldwide and the fact that 
HNBR is used and sourced worldwide by global automotive manufacturers.267 All 
customers that responded to the market investigation considered that suppliers’ 
plants based outside the EEA can credibly sell HNBR to customers in the EEA.268 
None of the respondents identified any barriers to purchasing or selling HNBR at a 
worldwide level at competitive terms.269  
(257)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for HNBR can be left 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible geographic market definition ( i.e. EEA -wide 
or worldwide).  
7.1.2.  Competitive assessment  
(258)  The Transaction gives rise to a vertically affected link concerning the supply of 
hydrogen (upstream) by SABIC and the supply of HNBR (downstream) by Saudi 
Aramco.  
                                                 
265  Responses to questions 3 and 4 of Q12 - Questionnaire to competitors and customers of HNBR.  
266  Form CO, paragraphs 2454 -2460.  
267  Responses to questions 3 and 4 of Q12 - Questionnaire to competitors and customers of HNBR.  
268  Responses to questions 3 and 4 of Q12 - Questionnaire to competitors and customers of HNBR.  
269  Responses to questions 3 and 4 of Q12 - Questionnaire to competitors and customers of HNBR.  


 
 
62 The Commission’s assessment  
(267)  Given the Parties’ (through SA BIC) small market shares in the upstream market for 
hydrogen and in any of its plausible sub -segments, and consequently the combined 
entity’s inability to foreclose access to hydrogen post -Transaction, input foreclosure 
will not be assessed in the present Decision.  
(268)  Regarding potential customer foreclosure risks, the results of the Commission’s 
market investigation indicated that the combined entity is unlikely to be able to 
successfully engage in any customer foreclosure strategy in relation to hydrogen 
rivals (upstream) through its downstream position in HNBR.  
(269)  First, as regards ability, the market investigation confirmed the Notifying Party’s 
estimates that Saudi Aramco is a large supplier of HNBR in the EEA and 
worldwide.273 However, the market investigation  confirmed that the combined entity 
would not have the ability to engage in a customer foreclosure strategy towards 
hydrogen suppliers. It strongly confirmed that major suppliers of hydrogen are 
international companies with a customer base that extends wel l beyond just HNBR 
producers.274 It accordingly confirmed that Saudi Aramco is a relatively small 
purchaser of hydrogen in the EEA and worldwide.275 In light of the above, it is 
unlikely that the combined entity would have the ability to foreclose suppliers of  
hydrogen (upstream) through a customer foreclosure strategy.  
(270)  Second, as regards incentive, the market investigation has broadly confirmed that the 
Notifying Party’s market share estimates for hydrogen are reliable and, in particular, 
that SABIC is conside red a minor supplier of hydrogen  at both worldwide and EEA 
levels, irrespective of the delivery channel (i.e. tonnage, bulk or cylinders).276 This 
supports the Notifying Party’s claim that the Parties’ very modest market share in 
this market would severely l imit the benefits that the combined entity would reap 
from a customer foreclosure strategy.  
(271)  Third, even if the combined entity completely ceases to purchase hydrogen from 
upstream rivals post -Transaction, such foreclosure is unlikely to have an adverse 
impact in the downstream market for HNBR in the EEA or worldwide. As explained 
above, the combined entity is a small purchaser of hydrogen. Consequently, an 
insufficient fraction of hydrogen output (upstream) would be affected by the revenue 
decreases result ing from the fact that the combined entity would, post -Transaction, 
completely cease to purchase hydrogen from upstream rivals. Moreover, even if the 
impact were concentrated on one upstream supplier who faces a cost increase as a 
result, there are a numbe r of strong suppliers of hydrogen (such as Air Liquide, Air 
Products and Linde)277 who would be unaffected by the foreclosure, and customers 
have confirmed that switching is easy.278 Therefore, it is unlikely that a customer 
foreclosure attempt would have an i mpact upstream, but even if it did, downstream 
                                                 
273  Responses to question 11 of Q12 - Ques tionnaire to competitors and customers of HNBR.  
274  Responses to question 1 of Q11 - Questionnaire to competitors and customers of Hydrogen.  
275  Responses to questions 10 and 13 of Q11 - Questionnaire to competitors and customers of Hydrogen  
and Form CO, Ann ex D.  
276  Responses to question 12 of Q11 - Questionnaire to competitors and customers of Hydrogen.  
277  Responses to questions 11 and 12 of Q11 - Questionnaire to competitors and customers of Hydrogen.  
278  Responses to questions 14 and 15 of Q11 - Questionnai re to competitors and customers of Hydrogen.  
 
 
63 customers would have an effective and timely counter -strategy to any foreclosure 
attempt.  
(272)  Moreover, all hydrogen manufacturers that responded to the market investigation 
confirmed that they do not have any ma terial concerns about a potential customer (or 
input) foreclosure strategy that the Parties might try to put in place and that, post -
Transaction, they would still have enough customers to sell hydrogen to, at both 
worldwide and EEA level .279 Respondents to t he market investigation also indicated 
that they do not expect that the Transaction would have any negative impact on 
prices, quality, choice or innovation for the market for HNBR (or indeed hydrogen) 
at either EEA or worldwide level and no material concer ns were raised regarding 
either product.280 
(273)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that it is unlikely that the 
Transaction could lead to customer for eclosure risks from the vertical link between 
hydrogen (upstream) and HNBR (downstream). As a result, this vertical link is 
unlikely to significantly impede effective competition.  
7.2. Ethylene oxide (upstream) with ethylene glycols (downstream)  
7.2.1.  Market definitions  
1. 7.2.1.1. Ethylene oxide (“EO”)  
(274)  EO is a colourless, hazardous and flammable gas obtained through the partial 
oxidation of ethylene. It is mostly used as a raw material for the production of other 
chemicals, such as EG, glycol ethers, ethoxylates, EOA, and polyalkylene glycols. 
EO also has applications as a disinfectant, for instance to sterilize surgical 
instruments in hospitals or to remove pests and microorganisms from spices or furs, 
among others.  
7.2.1.1.1.  Product market definition  
The Comm ission’s precedents  
(275)  In past decisions, the Commission has considered that EO constitutes a separate 
product market because EO is characterized by low substitutability with other 
products, especially when used as a direct raw material in chemical reactions.281 In 
more recent cases, the Commission left the precise market definition open.282 In 
Ineos/BP Dormagen,283 the Commission also considered whether onsite supplies 
(i.e. long -term arrangements with customers whose plants that convert EO are 
located on, or adjac ent to, the EO supplier’s site and connected via pipeline) and off -
                                                 
279  Responses to question 18 of Q11 - Questionnaire to competitors and customers of Hydrogen.  
280  Responses to questions 18.1 and 18.2 of Q11 - Questionnaire to competitors and customers of HNBR 
and responses to q uestions 19.1, 19.2 and 20 of Q11 - Questionnaire to competitors and customers of 
Hydrogen.  
281  See cases COMP/M.4005 - Ineos/Innovene , decision of 09.12.2005 and COMP/M.2345 - Deutsche 
BP/Erdölchemie , decision of 26.04.2001.  
282  See cases COMP/M.5927 - BASF /Cognis , decision of 30.11.2010, COMP/M.4094 - Ineos/BP 
Dormagen , decision of 10.08.2006.  
283  See case COMP/M.4094 - Ineos/BP Dormagen , decision of 10.08.2006.  
 
 
64 site supplies (i.e. supplies to other customers involving transport) constituted two 
separate markets, but ultimately left the exact market definition open.  
The Notifying Party’s view  
(276)  The Notifying Party submits that, for the case at hand, and given the Parties’ very 
limited sales of EO in the EEA (amounting to less that EUR […] in value), the 
competitive assessment should be done based on a product market encompassing all 
EO sales.284  
The C ommission’s assessment  
(277)  The majority of respondents to the market investigation indicated that EO is not 
substitutable with other products, explaining that it has specific properties and 
applications for which there are no substitutes available.285 Some respo ndents 
indicated that a distinction between offsite EO (which is generally purified EO) and 
onsite EO (which is generally crude EO) may be justified, however, the majority of 
respondents did not consider that any segmentation of EO is necessary.286 
(278)  In any ev ent, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for EO can be left open, 
since the Transaction does not raise serious doubts as to its compatibility with the 
internal market, un der any plausible product market definition (i.e. as an overall EO 
market or segmented between onsite and off -site supplies).  
7.2.1.1.2.  Geographic market definition  
The Commission’s precedents  
(279)  In the past, the Commission has considered the relevant geographic marke t for EO 
and its potential sub -segments to be Western Europe (EEA plus Switzerland) or 
regional (Northern or Southern Europe), given the difficulties and costs associated 
with the transportation of this hazardous product,287 but ultimately left the exact 
geographic market definition open.288  
The Notifying Party’s view  
(280)  The Notifying Party submits that, for the case at hand, there precise geographic 
market definition for EO can be left open given the very limited sales in the EEA of 
the Parties, whose market shares remain far below 30% regardless of the precise 
geographic market definition.289  
  
                                                 
284  Form CO, paragraphs 1766 -1767.  
285  Responses to question 3 of Q16 - Questionnaire to competitors and customers of Ethylene oxide . 
286  Responses to question 4 of Q16 - Questionnaire to competitors and customers of Ethylene oxide . 
287  See cases COMP/M.5927 - BASF/Cognis , decision of 30.11.2010, COMP/M.4094 - Ineos/BP 
Dormagen , decision of 10.0 8.2006, COMP/M.4005 - Ineos/Innovene , decision of 09.12.2005 and 
COMP/M.2345 - Deutsche  BP/Erdölchemie , decision of 26.04.2001.  
288  See case COMP/M.5927 - BASF/Cognis , decision of 30.11.2010.  
289  Form CO, paragraph 1768.  
 
 
65 The Commission’s assessment  
(281)  The market investigation indicated that the relevant geographic market for EO is 
likely regional or EEA -wide in scope, pointing to significant  cross -border trade 
flows within, as well as beyond, the EEA.290 Respondents generally considered that, 
due to the hazardous nature of the product, which makes transportation difficult, 
there is little or no overseas transportation of EO. Moreover, several m arket 
participants indicated that, in their view, the relevant geographic market for EO is 
wider than Western Europe and should also include Poland, Slovakia and Romania, 
and possibly go as far as Russia.291  
(282)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for EO can be left 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible geographic market d efinition (i.e. regional 
or EEA -wide).  
7.2.1.2.  Ethylene glycols (“EG”)  
(283)  As explained above in paragraph (72) onwards, the exact product and geographic 
market definitions for EG can be left open as no competitive concerns arise under 
any plausible product market definition (i.e. EG overall, or segmented between 
MEG, DEG and TEG) or geographic market definition (i .e. worldwide or EEA -
wide).  
7.2.2.  Competitive assessment  
(284)  The Transaction gives rise to a vertically affected link concerning the supply of EO 
(upstream) and the supply of EG (downstream).  
(285)  Upstream, Saudi Aramco sells limited amounts of EO, at both worldwide and  EEA 
level. More specifically, Saudi Aramco only sells EO through its affiliates […]. In 
turn, SABIC is not active in EO.  
(286)  Downstream, Saudi Aramco and SABIC both produce and sell EG. Saudi Aramco 
has no sales of EG in the EEA. SABIC sells EG at both EEA an d worldwide levels 
(see section 6.2.2 ). 
  
                                                 
290  Responses to question 5 of Q16 - Questionnaire to competitors and customers of Ethylene oxide. The 
market investigation strongly indicated that a market limited to Western Europe would not be 
appropriate for EO or for the purposes of the present Decision, so it is not considered fur ther in this 
Decision.  
291  Responses to question 8 of Q16 - Questionnaire to competitors and customers of Ethylene oxide.  


 
 
68 have the ability to engage in a customer foreclosure strategy. The market 
investigation broadly confirmed that the vast majority of EG suppliers are already 
vertically integrated and produce EO to address their internal needs, and in general 
do not source this product externally, which considerably restrains the Parties’ 
ability to engage in any customer foreclosure strategy.295 Importantly, as the Parties 
do not procure EO from third parties they cannot foreclose any EO suppliers (e.g. by 
reducing or stopping purchases of EO from them). All EO manufacturers that 
responded to the market investigation confirmed that they do not have any material 
concerns about a potential customer foreclosure strateg y and that, post -Transaction, 
they would still have enough customers to sell EO to at both worldwide and EEA 
level.296 In light of the above, it is unlikely that the combined entity would have the 
ability to foreclose manufacturers of EO (upstream) through a  customer foreclosure 
strategy.  
(295)  Second, as regards incentive, the market investigation has broadly confirmed that the 
Notifying Party’s market share estimates are reliable and, in particular, that Saudi 
Aramco is considered a very minor supplier of EO  at EEA level.297 This would tend 
to support the view that even if such a customer foreclosure was possible, and was 
efficiently implemented so that it successfully managed to bring up the prices for EO 
in the EEA, the Parties’ very modest market share in th is market would significantly 
limit the benefits that the combined entity would reap from such a strategy.  
(296)  Third, such a strategy is unlikely to have an adverse impact in the downstream 
market for EG in the EEA or worldwide, mainly because the vast majori ty of EG 
suppliers are vertically integrated for their EO supply. The majority of respondents 
confirmed that, post -Transaction, there will remain a number of strong suppliers of 
EO who will continue to constrain the combined entity at both worldwide and EE A 
level, such as INEOS, BASF and Royal Dutch Shell.298 The market investigation 
moreover confirmed that non -integrated customers of EO typically procure EO from 
multiple suppliers, can switch fairly easily and that they do switch in practice.299 
Therefore, cus tomers will have effective and timely counter -strategies to any attempt 
by the combined entity to increase prices or reduce sales upstream. Moreover, 
respondents do not expect that the Transaction would have any negative impact on 
prices, quality, choice o r innovation for the market for EG (or indeed EO) at either 
EEA or worldwide level and no material concerns were raised regarding either 
product.300 
(297)  In light of the above, taking account of the results of the market investigation and of 
all the evidence avai lable to it, the Commission considers that it is unlikely that the 
                                                 
295  Responses to question 5 of Q16 - Questionnaire to competitors and customers of Ethylene Oxide. Also 
note that the Commission has already in the past adjudicated on the validity of this general argument t o 
dispel any competitive concern as regards the vertical relationship between EO and EG in case 
COMP/M.4094 - Ineos/BP Dormagen , decision of 10.08.2006.  
296  Responses to question 17 of Q16 - Questionnaire to competitors and customers of Ethylene Oxide.  
297  Responses to question 12 of Q16 - Questionnaire to competitors and customers of Ethylene Oxide.  
298  Responses to question 17 of Q16 - Questionnaire to competitors and customers of Ethylene Oxide.  
299  Responses to questions 13, 14 and 15 of Q16 - Questionnair e to competitors and customers of Ethylene 
Oxide.  
300  Responses to question 22 of Q2 - Questionnaire to competitors and customers of Ethylene Glycols, and 
responses to questions 18.1, 18.2 and 19 of Q16 - Questionnaire to competitors and customers of 
Ethyle ne Oxide.  
 
 
69 Transaction would lead to customer foreclosure risks from the vertical link between 
EO (upstream) and EG (downstream).  
7.3. Butadiene (upstream) with chloroprene rubber (downstream)  
7.3.1.  Market defin itions  
7.3.1.1. Butadiene  
(298)  Butadiene is a reactive, colourless gas generally stored and supplied in pressurised 
and refrigerated tanks or pipelines. It can be produced by extractive distillation from 
crude C4, which is a by -product of ethylene and propylene producti on, or as a by -
product of the steam cracking of naphtha. Butadiene is used as an input to 
manufacture a number of products. It is used to produce (i) “rubber type” polymers 
(e.g. chloroprene rubber, polybutadiene rubber, styrene butadiene rubber), which ar e 
used in automotive tyres, hoses, conveyor belts, footwear, flooring, additives, 
gloves, etc., and (ii) “plastic type” polymers, which are used in consumer and 
industry electronics, automotive parts, etc. Production of two types of synthetic 
rubber, namel y polybutadiene rubber and styrene butadiene rubber, accounts for 
nearly 55% of global butadiene demand.  
7.3.1.1.1.  Product market definition  
The Commission’s precedents  
(299)  The Commission has considered the market for butadiene in previous decisions.301 
The Commission h as previously considered that butadiene is a separate product 
market,302 but in more recent decisions it left the precise market definition open.303 
In addition, the Commission's market investigation in a previous case suggested that 
there is only one grade of  butadiene.304  
The Notifying Party’s view  
(300)  The Notifying Party submits that, for the purposes of the present Decision, the exact 
product market definition can be left open because the Transaction will not lead to 
competition concerns regardless of the market  definition adopted.305 
The Commission’s assessment  
(301)  The majority of respondents to the market investigation indicated that butadiene is 
not substitutable with other products given its specific properties.306 The majority 
                                                 
301  See case COMP/M.6905 - Ineos/Solvay , decision of 8.05.2014. See also case COMP/M.4041 
Basell/Société du Craqueur de l’Aubette , decision of 22.12.2015 and case COMP/M.2345 Deutsche 
BP/ Erdölchemie , decision of 26.04.2001.  
302  See case COMP/M.234 5 Deutsche BP/  Erdölchemie , decision of 26.04.2001.  
303  See case COMP/M.6905 - Ineos/Solvay , decision of 8.05.2014 and COMP/M.4041 Basell/Société du 
Craqueur de l’Aubette , decision of 22.12.2015.  
304  See case COMP/M.6905 - Ineos/Solvay , decision of 8.05.2014 . See also case COMP/M.4041 
Basell/Société du Craqueur de l’Aubette , decision of 22.12.2015 and case COMP/M.2345 Deutsche 
BP/ Erdölchemie , decision of 26.04.2001.  
305  Form CO, paragraphs 471 -473. 
306  Responses to question 3 of Q17 - Questionnaire to competit ors and customers of Butadiene.  
 
 
70 also confirmed that no further segmenta tion is necessary (for instance by grade) and 
that butadiene is a commodity product.307  
(302)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for butadiene can be left 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible product market definition.  
7.3.1.1.1.  Geographic market definition  
The Commission’s precedents  
(303)  In a past decision, the Commission found that the  relevant geographic market for 
butadiene was Western Europe.308 In more recent decisions, the Commission has 
considered the relevant geographic market for butadiene could be at least “Western 
Europe +”, (i.e. including Western Member States, Poland and the Czech Republic) 
but ultimately left the geographic market for butadiene open.309     
The Notifying Party’s view  
(304)  The Notifying Party submits that the relevant geographic market for butadiene is 
global or at least EEA -wide in scope, arguing that there are no t rade barriers, that 
manufacturers of butadiene supply customers around the world with significant trade 
flows and that the EEA is a large net exporter of butadiene to other regions.310  
The Commission’s assessment  
(305)  The market investigation indicated that the relevant geographic market for butadiene 
could be EEA -wide or even worldwide.311 The majority of respondents considered 
that the market for butadiene is worldwide or EEA -wide, noting that butadiene is 
traded around the world and that the EEA is a net exporte r of butadiene due to 
comparatively low feedstock prices in Europe.312 Competitors explained that, given 
the favourable feedstock prices within the EEA, imports to the EEA are relatively 
limited.313 However, the majority of customers responding to the market 
investigation confirmed that they could credibly source butadiene from suppliers 
based outside the EEA for use in their facilities within the EEA.314 The respondents 
                                                 
307  Responses to question 4 of Q17 - Questionnaire to competitors and customers of Butadiene.  
308  See case COMP/M.2345 Deutsche BP/Erdölchemie , decision of 26.04.2001  
309  See case COMP/M.6905 - Ineos/Solvay , decision of 8.05.2014. See also case COMP/M.4041 
Basell/Société du Craqueur de l’Aubette , decision of 22.12.2015 and case COMP/M.2345 Deutsche 
BP/Erdölchemie , decision of 26.04.2001.  
310  Form CO paragraphs 474 -477. 
311  The market investigation strongly in dicated that a market limited to Western Europe+ would not be 
appropriate for butadiene or any of its sub -segments for the purposes of the present Decision, so it is 
not considered further in this Decision.  
312  Responses to question 5 of Q17 - Questionnaire  to competitors and customers of Butadiene.  
313  Responses to questions 5 and 6 of Q17 - Questionnaire to competitors and customers of Butadiene.  
314  Responses to question 7 of Q17 - Questionnaire to competitors and customers of Butadiene.  
 
 
71 to the investigation confirmed that, provided prices are favourable, there are no 
barriers to  selling butadiene EEA -wide or worldwide.315 
(306)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for butadiene can be 
left open, since the Transaction does not raise serio us doubts as to its compatibility 
with the internal market, under any plausible geographic market definition (i.e. 
EEA-wide or worldwide).  
7.3.1.2. Chloroprene rubber  
(307)  Chloroprene rubber (also referred to as polychloroprene or neoprene) is a synthetic 
rubber with a high chlorine content that is produced by polymerising chloroprene. 
Chloroprene rubber has good mechanical strength, low flammability and good 
resistance to ozone, weather, aging and chemicals. Chloroprene rubber is used 
mainly for technical rubber parts ( such as cables and hoses), which are often used in 
the automotive industry, as well as for adhesives (in particular in the shoe and 
furniture industries) and as latex for diving equipment, bitumen modifications and 
the inner sole of shoes.  
7.3.1.2.1  Product market d efinition  
The Commission’s precedents  
(308)  In a past decision, the Commission found that the chloroprene rubber forms a 
separate product market.316 In particular, the Commission noted that synthetic 
elastomers, such as chloroprene rubber, have specific character istics and/or costs 
which define the applications for which they may be used.  
The Notifying Party’s view  
(309)  The Notifying Party submits that, for the purposes of the present Decision, the exact 
product market definition can be left open, because the Transacti on would not lead 
to any competitive concerns, regardless of the precise market definition.317 
The Commission’s assessment  
(310)  The majority of respondents to the market investigation indicated that chloroprene 
rubber is not substitutable with other products given its specific properties and 
applications.318 A majority of customers also indicated that it may be appropriate to 
further segment chloroprene rubber by grade, in particular as certain applications 
require chloroprene rubber with a low monomer content.319  
(311)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for chloroprene rubber 
                                                 
315  Responses to questions 8.1 and 8.2 of Q17 - Questionnaire to competitors and customers of Butadiene . 
Some respondents noted that REACH authorisation may be necessary to sell within the EEA, but this 
was not considered a material barrier.  
316  See case COMP I V/M.663 - Dow/Dupont , decision of 21.02.1996.  
317  Form CO, paragraphs 2080 -2081.  
318  Responses to question 3 of Q18 - Questionnaire to competitors and customers of Chloroprene rubber.  
319  Responses to question 4 of Q18 - Questionnaire to competitors and cust omers of Chloroprene rubber.  
 
 
72 can be left open, since the Transaction does not raise serious doubts as to its 
compatibility w ith the internal market, under any plausible product market definition 
(i.e. chloroprene rubber overall or segmented by grade).  
7.3.1.2.2.  Geographic market definition  
The Commission’s precedents  
(312)  In a past decision, the Commission has considered the relevant geograp hic market 
for chloroprene rubber to be EEA -wide, if not wider, but ultimately left the precise 
market definition open320 In a past cartel decision relating to chloroprene rubber, the 
Commission noted that “ the major suppliers and customers are present in ea ch of 
the principal economic regions of the world and operated on a global basis ”.321  
The Notifying Party’s view  
(313)  The Notifying Party submits that the relevant geographic market for chloroprene 
rubber is global or at least EEA -wide in scope, arguing that the re are no trade 
barriers, manufacturers of chloroprene rubber supply customers around the world 
and transportation costs are low.322 However, the Notifying Party submits that for 
the purposes of the present Decision, the exact geographic market definition can be 
left open as the Transaction will not will not lead to any competitive concerns 
regardless of the definition adopted.  
The Com mission’s assessment  
(314)  The market investigation indicated that the relevant geographic market for 
chloroprene rubber is likely worldwide or at least EEA -wide. The majority of 
respondents considered there are no barriers to selling chloroprene rubber EEA -
wide.323 While responses were split on whether there are barriers to selling 
chloroprene rubber worldwide, respondents explained that chloroprene rubber is in 
practice shipped worldwide and considered the market for chloroprene rubber to be 
worldwide.324 Competito rs explained that they can readily supply EEA customers 
from their production facilities based outside the EEA.325 Customers responding to 
the market investigation confirmed that they can and do source chloroprene rubber 
from suppliers based outside the EEA for use in their facilities within the EEA 
(citing examples of sourcing from Japan, the US and China).326  
(315)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for chloropr ene rubber 
can be left open, since the Transaction does not raise serious doubts as to its 
compatibility with the internal market, under any plausible geographic market 
definition (i.e. EEA -wide or worldwide).  
                                                 
320  See case COMP/M.663 - Dow/Dupont , decision of 21.02.1996.  
321  See case COMP/38629 Chloroprene Rubber , Commission decision of 05.12.2007.  
322  Form CO, paragraphs 2082 -2085.  
323  Responses to question 8.1 of Q18 - Questionnaire t o competitors and customers of Chloroprene rubber.  
324  Responses to questions 5 and 8.2 of Q18 - Questionnaire to competitors and customers of Chloroprene 
rubber.  
325  Responses to question 6 of Q18 - Questionnaire to competitors and customers of Chloroprene rubber.  
326  Responses to question 7 of Q18 - Questionnaire to competitors and customers of Chloroprene rubber.  


 
 
75 (324)  First, as regards ability, the market investigation confirmed the Notifying Party’s 
estima tes that Saudi Aramco is a large supplier of chloroprene rubber in the EEA.333 
However, the market investigation confirmed that the combined entity would not 
have the ability to engage in a customer foreclosure strategy. The market 
investigation confirmed th at butadiene is a commodity product, and respondents 
noted that it is used to manufacture a range of rubber products.334 This, together with 
the responses and data received as part of the market investigation,335 supports the 
Notifying Party’s arguments that S audi Aramco only represents a modest proportion 
of purchases of butadiene in the EEA. Moreover, the majority of respondents did not 
expect the Transaction to have a significant impact on the market for butadiene and, 
in particular, the majority of supplier s that expressed a view considered that there 
will remain a sufficient pool of customers to which they can sell butadiene post -
Transaction.336 In light of the above, it is unlikely that the combined entity would 
have the ability to foreclose butadiene suppli ers (upstream) by attempting a customer 
foreclosure strategy.  
(325)  Second, as regards incentives, the market investigation has broadly confirmed that 
the Notifying Party’s market share estimates are reliable and, in particular, that 
Saudi Aramco is a very minor supplier of butadiene at EEA level.337 This would tend 
to suppo rt the view that even if such customer foreclosure was possible, and was 
efficiently implemented so that it successfully managed to bring up the prices for 
butadiene in the EEA, the Parties’ very modest market share in this market would 
significantly limit  the benefits that the combined entity would reap from such a 
strategy. However, some respondents to the market investigation considered that the 
combined entity may have an incentive to vertically integrate its supply of butadiene  
with the manufacture of downstream products (such as chloroprene rubber), though 
others noted that this may not be feasible from a logistical perspective.338  
(326)  Third, even if the combined entity completely ceases to purchase butadiene from 
upstream rivals post -Transaction, such a strategy is unlikely to have an adverse 
impact in the downstream market for chloroprene rubber in the EEA. As explained 
above, the comb ined entity is a small purchaser of butadiene. Consequently, an 
                                                                                                                                                      
chloroprene rubber. Even if the (downstream) product market for chloroprene rubber were segmented 
by grade and the combined entity were to be the sole supplier of a particular grade , for the same reasons 
as for chloroprene rubber, the Transaction would not raise serious doubts as to its compatibility as a 
result of this vertical link. Indeed, (i) all plausible grades of chloroprene rubber use butadiene as an 
input, and (ii) regardles s of the plausible sub -segmentation of chloroprene rubber, for the reasons 
described in this Section (in particular, the Parties’ low share of purchases of butadiene, their low share 
of sales of butadiene, and the fact that respondents to the market invest igation did not raise any 
concerns regarding a potential foreclosure risk), the Parties will lack the ability and incentive to engage 
in a customer foreclosure strategy, and even if they do, such strategy is unlikely to have an adverse 
impact in the downst ream market for chloroprene rubber (or any of its sub -segments) in the EEA.  
333  Responses to questions 11.1 and 12 of Q18 - Questionnaire to competitors and customers of 
Chloroprene rubber.  
334  Responses to questions 3, 4 and 14 of Q17 - Questionnaire to com petitors and customers of Butadiene.  
335  Responses to question 9 of Q17 - Questionnaire to competitors and customers of Butadiene , and Form 
CO Annex D.  
336  Responses to questions 17 and 18 of Q17 - Questionnaire to competitors and customers of Butadiene.  
337  Responses to questions 9, 10, 11 and 12 of Q17 - Questionnaire to competitors and customers of 
Butadiene.  
338  Responses to question 18 of Q17 - Questionnaire to competitors and customers of Butadiene  and 
question 18 of Q18 - Questionnaire to competitors and  customers of Chloroprene rubber.  
 
 
76 insufficient fraction of butadiene output (upstream) would be affected by the revenue 
decreases resulting from the fact that the combined entity would, post -Transaction, 
completely cease to pu rchase butadiene from upstream rivals. Accordingly, s ome 
respondents stated that even if Saudi Aramco were to vertically integrate its 
butadiene and chloroprene rubber activities they do not expect this to have a material 
impact on the market for chloropre ne rubber given that chloroprene rubber 
production is a small use of butadiene.339 Moreover, even if the impact were 
concentrated on one upstream supplier who faces a cost increase as a result, there are 
a number of strong suppliers of butadiene, including E vonik, INEOS, BASF, Dow, 
PKN Orlen, Total and others,340 who would be unaffected, and customers can switch 
fairly easily.341 Finally, w hile butadiene appears to be a material input cost in the 
manufacture of chloroprene rubber ( [20-30]%, according to the Notif ying Party),342 
a number of respondents explained that the market for butadiene is “long” in the 
EEA, in that there is a greater supply of butadiene than demand because feedstock 
prices in the EEA are competitive.343 Therefore, it is unlikely that a customer 
foreclosure attempt would have an impact upstream, but even if it did, downstream 
customers would have an effective and timely counter -strategy to any foreclosure 
attempt.  
(327)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the vertical link between butadiene (upstream) and chloroprene rubber (downstre am) 
and, in particular, that it is unlikely that this vertical link would lead to customer 
foreclosure risks.  
7.4. Ethylene (upstream) with C4 LLDPE (downstream); butene -1 (upstream) with 
C4 LLDPE (downstream)  
(328)  In this Section, the Commission analyses the vertic al effects arising from the 
Transaction because of the vertically affected market in the supply of C4 LLDPE 
(where both Parties are active), which is vertically linked with the supply of two 
products: ethylene (where both Parties are active) and butene -1 (where only SABIC 
is active).  
7.4.1.  Market definitions  
2. 7.4.1.1. Ethylene  
(329)  Ethylene is the simplest olefin hydrocarbon, and the most widely produced organic 
compound worldwide. It occurs naturally in crude oil and natural gas, but it is 
mostly produced industriall y by cracking heavier hydrocarbons such as naphtha, 
liquid petroleum gas, or ethane.  
                                                 
339  Responses to question 18 of Q18 - Questionnaire to competitors and customers of Chloroprene rubber . 
340  Responses to questions 9 and 11 of Q17 - Questionnaire to competitors and customers of Butadiene.  
341  Responses to qu estions 13, 14 and 15 of Q17 - Questionnaire to competitors and customers of 
Butadiene . 
342  Form CO, paragraph 2171  
343  Responses to questions 5, 6 and 7 of Q17 - Questionnaire to competitors and customers of Butadiene . 
 
 
77 (330)  Ethylene is used to produce polyethylene, ethylene oxide, or ethylbenzene, which 
themselves serve to produce a number of second -level derivatives including EG.  
7.4.1.1.1.  Product ma rket definition  
The Commission’s precedents  
(331)  The Commission has previously considered ethylene to be a separate relevant 
product market.344  
The Notifying Party’s view  
(332)  The Notifying Party does not disagree with the Commission’s precedents.345 
The Commission’s assessment  
(333)  The market investigation has largely confirmed the Commission’s precedents that 
ethylene is a separate relevant product market. Market respondents generally agreed 
that ethylene is a commodity product with a single grade and is not substitutable  
with any other products.346  
(334)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for ethylene can be left 
open, since the Transaction does not raise serious doubts as to its  compatibility with 
the internal market, under any plausible product market definition.  
7.4.1.1.2.  Geographic market definition  
The Commission’s precedents  
(335)  The Commission previously considered that the relevant geographic market for 
ethylene should be as broad as th e available pipeline networks, given its highly 
flammable nature that makes it unsuitable for road or rail transport.347  
The Notifying Party’s view  
(336)  The Notifying Party submits that the market for ethylene is global or at least 
EEA-wide in scope.348 This is due to the fact that there are no trade barriers globally 
and especially between EEA countries, and that transport between various global 
regions has significantly increased over the past years. For instance, the Notifying 
Party notes that the eth ylene it sells to the EEA is [Information on Saudi Aramco’s 
commercialization of ethylene in the EEA ], and that a portion of the ethylene it 
produces in the EEA is sold to China. Therefore, the Notifying Party considers that 
the Commission’s precedents are  overly narrow and should be widened to include at 
least the territory of the EEA.  
                                                 
344  See c ase COMP/M.4744 - Ineos/Boreal is, decision of 24.08.2007 and case COMP/M.2345 - Deutsche 
BP/Erd ölchemie , decision of 26.04.2001.  
345  Form CO, paragraphs 125 -126. 
346  Responses to questions 3 and 4 of Q13 - Questionnaire to competitors and customers of Ethylene .  
347  See c ase COMP/M.4744 - Ineos/Borealis , decision of 24.08.2007 and case COMP/M.2345 - Deutsche 
BP/Erd ölchemie , decision of 26.04.2001.  
348  Form CO, paragraphs 129 -135. 
 
 
78 The Commission’s assessment  
(337)  The market investigation confirmed that while ethylene can be and is shipped 
globally, the viability of trading it in EEA is limited by the need to have access to 
the pipeline network and to coastal storage facilities via an existing terminal.349 
Therefore, respondents to the market investigation appeared to equate the EEA with 
the pipeline network. The majority of customers reported purchasing ethyl ene for 
use in the EEA from EEA -based suppliers, and saw no major barriers to purchasing 
from anywhere in the EEA.350 Additionally, the majority of suppliers indicated that 
they sold ethylene on a global scale, and the majority of customers considered that 
suppliers’ plants outside EEA could credibly sell ethylene to customers in the 
EEA.351 
(338)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for ethylene can be left 
open bet ween EEA and worldwide, since the Transaction does not raise serious 
doubts as to its compatibility with the internal market, under any plausible 
geographic market definition.  
7.4.1.2. Butene -1 (C4)  
(339)  Butene -1 is the shortest type of Linear Alpha Olefin (“LAO”), whic h are classified 
by the length of the hydrocarbon chain, varying from four carbons (butene -1) to 
more than thirty (expressed as C30+). LAOs have a wide range of applications. 
Butene -1 (C4) is primarily used as a co -monomer in the production of some 
differe ntiated types of polyethylene (HDPE and C4 LLDPE). Butene -1 is also used 
as an intermediary in the production of various chemical products including butyl 
mercaptan, aldehyde intermediates, alcohols and other C4 derivatives.  
7.4.1.2.1.   Product market definition  
The Commission’s precedents  
(340)  The Commission has not previously considered butene -1 as a separate relevant 
product market. It has treated LAOs as a separate market, but it has also left open 
whether LAOs should be further sub -segmented.352 
The Notifying Party’s view  
(341)  The Notifying Party does not disagree with the Commission’s precedents.353 
The Commission’s assessment  
(342)  Most respondents to the market investigation considered LAOs can be substituted 
with each other and therefore constitute a single relevant product mar ket. However, 
some indicated that for the manufacture of polyethylene, substitution between 
                                                 
349  Responses to questions 5 and 6 of Q13 - Questionnaire to competitors and customers of Ethyle ne. 
350  Responses to questions 9 and 10 of Q13 - Questionnaire to competitors and customers of Ethylene . 
351  Responses to questions 7 and 8 of Q13 - Questionnaire to competitors and customers of Ethylene . 
352  See c ase COMP/M.1293 - BP/Amoco , decision of 11.12 .1998 and case COMP/M.2299 - BP 
Chemicals/Solvay/HDPE JV , decision of 29.11.2001.  
353  Form CO, paragraph 1419.  
 
 
79 different types of LAOs might prove costly and would require reformulation as well 
as approval work.354 
(343)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for butene -1 can be left 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible product market definition (i. e. as an overall 
LAO market or a narrower market for butene -1). 
7.4.1.2.2.  Geographic market definition  
The Commission’s precedents  
(344)  The Commission has not previously considered the geographic scope of a plausible 
market for butene -1. It has, however, considered that  the geographic market for all 
LAOs (including butene -1) would be global or at least EEA -wide.355  
The Notifying Party’s view  
(345)  The Notifying Party submits that the geographic market for the production and sale 
of all LAOs is global or at least EEA -wide in sco pe, as there are no trade barriers 
globally and especially in the EEA.356 
The Commission’s assessment  
(346)  The Commission’s market investigation confirmed that all LAOs are globally traded 
with ease and with no major barriers impeding it.357 Suppliers indicated tha t they 
would be able to easily supply the EEA from plants outside it, and customers 
considered that plants outside the EEA can credibly sell LAOs to customers in the 
EEA.358  
(347)  In any event, the Commission considers that, for the purposes of the present 
Decisi on, the exact scope of the geographic market definition for butene -1 can be 
left open, since the Transaction does not raise serious doubts as to its compatibility 
with the internal market, under any plausible geographic market definition (i.e. 
EEA-wide or worldwide).  
7.4.1.3. C4 LLDPE  
(348)  As explained above in paragraphs (117)  onwards, the exact product and geographic 
market definitions can be left open as no comp etitive concerns arise under any 
plausible product market definition (including if polyethylene is segmented between 
LDPE, LLDPE and HDPE or by comonomer, for example to the level of C4 
LLDPE) or geographic market definition (worldwide or EEA -wide).  
                                                 
354  Responses to question 4 of Q15 - Questionnaire to competitors and customers of Hexene -1. 
355  See c ase COMP/M.1293 - BP/Amoco , decision of 11.12. 1998 and case COMP/M.2299 - BP 
Chemicals/Solvay/HDPE JV , decision of 29.11.2001.  
356  Form CO, paragraphs 1420 -1421.  
357  Responses to questions 5 and 8 of Q 15 - Questionnaire to competitors and customers of Hexene -1. 
358  Responses to questions 6 and 7 of Q 15 - Questionnaire to competitors and customers of Hexene -1. 

 
 
81 engage in any customer foreclosure strategy in relation to ethylene rivals (upstream) 
through its downstream position in C4 LLDPE.  
(355)  First, as re gards ability, the data provided by the Notifying Party and received 
pursuant to the market investigation confirmed that the combined entity is a 
relatively small purchaser of ethylene in the EEA and worldwide.360 The majority of 
respondents did not expect t he Transaction to have a significant impact on the 
market for ethylene and, in particular, the majority of suppliers that expressed a view 
considered that there will remain a sufficient pool of customers to which they can 
sell ethylene post -Transaction.361 In light of the above, it is unlikely that the 
combined entity would have the ability to foreclose ethylene suppliers (upstream) by 
attempting a customer foreclosure strategy.  
(356)  Second, as regards incentive, the market investigation has broadly confirmed that  the 
Notifying Party’s market share estimates are reliable and, in particular, that Saudi 
Aramco is considered a very minor supplier of ethylene , at both worldwide and EEA 
level, and irrespective of the precise market definition considered.362 This supports 
the idea that even if such a customer foreclosure was possible, and was efficiently 
implemented so that it successfully managed to bring up the prices for ethylene in 
the EEA or worldwide, the Parties’ modest market share in this market would 
severely limi t the benefits that the combined entity would reap from such a strategy.  
(357)  Third, even if the combined entity completely ceases to purchase ethylene from 
upstream rivals post -Transaction, such a strategy is unlikely to have an adverse 
impact in the downstre am market for C4 LLDPE in the EEA. As explained above, 
the combined entity is a small purchaser of ethylene. Consequently, an insufficient 
fraction of ethylene output (upstream) would be affected by the revenue decreases 
resulting from the fact that the co mbined entity would, post -Transaction, completely 
cease to purchase ethylene from upstream rivals. Moreover, even if the impact were 
concentrated on one upstream supplier who faces a costs increase as a result,  the 
market investigation confirmed that there  are a number of strong suppliers of 
ethylene in the EEA that will remain post -Transaction, including BASF, BP, Dow, 
Shell, Total and others.363 The majority of customers also confirmed that they multi -
source and that switching between suppliers of ethylene (which they indicated is a 
commodity product) is easy.364 Therefore, it is unlikely that a customer foreclosure 
attempt would have an impact upstream, but even if it did, downstream customers 
would have an effective and timely counter -strategy to any foreclo sure attempt.  
(358)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, for the purposes of the present Decision the 
Commission considers that the Transaction does not raise serious doubts as  to its 
compatibility with the internal market in relation to the vertical link between 
ethylene (upstream) with C4 LLDPE (downstream), regardless of whether the 
market is considered to be EEA -wide or worldwide.  
                                                 
360  Responses to question 11 of Q13 - Questionnaire to competitors and customers of Ethylene and Form 
CO, Annex D.  
361  Responses to question 19 of Q13 - Questionnaire to competitors and customers of Ethylene . 
362  Responses to question 13 of Q13 - Questionnaire to competitors and customers of Ethylene . 
363  Responses to question 13.1 of Q13 - Questionnaire to competitors and customers of Ethylene . 
364  Responses to questions 15 and 16 of Q13 - Questionnaire to competitors and customers of Ethylene . 

 
 
83 (364)  First, as regards ability, the market investigation confirmed that SABIC is a large 
supplier of C4 LLDPE in the EEA.368 However, data submitted by the Notifying 
Party indicates that the combined entity will be a sm all purchaser of butene -1.369 In 
addition, the majority of respondents did not expect the Transaction to have a 
significant impact on the upstream market for LAOs, including in the market for 
butene -1, and, in particular, all LAO manufacturers that expressed  a view considered 
that the Transaction would have no significant impact on their business.370 In light of 
the above, it is unlikely that the combined entity would have the ability to foreclose 
butene -1 suppliers (upstream) by attempting a customer foreclosu re strategy.  
(365)  Second, as regards incentive, the market investigation has broadly confirmed that the 
Notifying Party’s market share estimates are reliable and, in particular, that SABIC 
is only a minor supplier of LAOs , at both worldwide and EEA level, and i rrespective 
of the precise market definition considered (while Saudi Aramco does not 
manufacture LAOs).371 This would tend to support the view that even if such a 
customer foreclosure was possible, and was efficiently implemented so that it 
successfully mana ged to bring up the prices for butene -1 or LAOs in the EEA or 
worldwide, the Parties’ very modest market share in this market would severely limit 
the benefits that the combined entity would reap from such a strategy.  
(366)  Third, even if the combined entity completely ceases to purchase butene -1 from 
upstream rivals post -Transaction, such a strategy is unlikely to have an adverse 
impact in the downstream market for C4 LLDPE in the EEA. As explained above, 
the combined entity is a small purchaser of butene -1. Consequently, an insufficient 
fraction of butene -1 output (upstream) would be affected by the revenue decreases 
resulting from the fact that the combined entity would, post -Transaction, completely 
cease to purchase ethylene from upst ream rivals. Moreover, even if the impact were 
concentrated on one upstream supplier who faces a costs increase as a result, the 
market investigation confirmed that there will remain a number of strong suppliers 
of LAOs to constrain the combined entity pos t-Transaction  and customers have 
confirmed that customers multi -source and have switched customer in the last three 
years.372 Therefore, it is unlikely that a customer foreclosure attempt would have an 
impact upstream, but even if it did, downstream customer s would have an effective 
and timely counter -strategy to any foreclosure attempt.  
(367)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the vertical link between butene -1 (upstream) with C4 LLDPE (downstream), 
regardless of whether the market is considered EEA -wide or worldwide.  
                                                 
368  Responses to question 11, 12, 13 of Q5 - Questionnaire to competitors and customers of Polyethylene . 
369 Form CO, Annex D.  
370  Responses to questions 18 and 19 of Q15 - Questionnaire to competitors and customers of Hexene -1. 
371  Responses to questions 11 and 12 of Q15 - Questionnaire to competitors and customers of Hexene -1. 
372  Responses to questions 10, 11, 13, 15 and 17 of Q15 - Questionnaire to competitors and customers of 
Hexene -1. 
 
 
84 7.5. Ethylene (upstream) with  ethylene propylene terpolymer rubber (EPDM) 
(downstream); propylene (upstream) with EPDM (downstream); and hexene -
1 (upstream) with EPDM (downstream)  
(368)  In this Section, the Commission analyses the vertical effects arising from the 
Transaction because of the  vertically affected market in the supply of EP(D)M 
(where both Parties are active), which is vertically linked with the supply of two 
products (upstream to EP(D)M): ethylene (where both Saudi Aramco and SABIC are 
active), propylene (where both Saudi Aramc o and SABIC are active), and hexane -1 
(where SABIC is active).  
7.5.1.  Market definitions  
4. 7.5.1.1. Ethylene  
(369)  As explained above in paragraphs (329)  onwards th e exact product and geographic 
market definitions for ethylene can be left open as no competitive concerns arise 
under any product or geographic market definition.  
7.5.1.2. Propylene  
(370)  Propylene is the second simplest member of the olefins family after ethylene. It i s a 
non-toxic, non -corrosive and colourless gas of a highly flammable nature. It is 
produced via a steam cracking process from a variety of feedstock, including from 
naphtha and from liquefied petrol gas. As a building block compound, its main use is 
to be  processed into polypropylene resins, which accounts for more than half of the 
global propylene consumption. Other uses of propylene include the production of 
propylene oxide, acrylic acid, or butanol, among others.  
7.5.1.2.1.  Product market definition  
The Commission’s precedents  
(371)  In past decisions, the Commission has considered propylene as a separate relevant 
product market,373 or left the precise product market definition open.374 
The Notifying Party’s view  
(372)  The Notifying Party does not disagree with the Commission’s precedents, but 
submits that the precise product market definition can be left open as the Transaction 
would not significantly impede effective competition irrespective of the precise 
product market definition.375 
The Commission’s assessment  
(373)  The market investigation has largely confirmed the Commission’s precedents that 
view propylene as a separate relevant product market. Market respondents generally 
agreed that propylene is not substitutable with any other products.376 However, 
                                                 
373  See case COMP/M.2345 - Deutsche BP/Erd ölchemie , decision of 26.04.2001.  
374  See Case COMP/M.7162 - Ineos/SSG Solvents Business , decision of 5.05.2014.  
375  Form CO, paragraphs 354 -355. 
376  Responses to question 3 of Q14 - Questionnaire to competitors and customers of Propylene .  
 
 
85 respondents drew a  distinction between three grades: polymer grade (purity of 
~99.5%), chemical grade (purity of ~90 -95%) and industrial or refinery grade (lower 
purity, ~60%). Respondents strongly indicated that the market is weighted towards 
the highest two grades, as ref inery grade propylene is usually consumed captively, 
rather than being traded widely and can only be used after upgrading it to chemical 
or polymer grade. 377 As one supplier explained “polymer grade is the product 
universally traded (…) the other grades are  normally consumed captively (…) where 
they are traded, they are traded in much smaller volumes and their price is a 
percentage of the polymer grade contract price” .378 Moreover, suppliers indicated 
that there is high supply -side substitutability, as all dif ferent production processes 
are capable of producing propylene with different purities.379   
(374)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for propylene can be left 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible product market definition.  
7.5.1.2.2.  Geographic market definition  
The Commission’s precedents  
(375)  In past decisions, the Commission has consider ed that the relevant geographic 
market for propylene is at least Western European and possibly EEA -wide,380 or left 
the precise geographic market definition open.381 
The Notifying Party’s view  
(376)  The Notifying Party does not disagree with the Commission’s precede nts, but 
submits that the precise market definition can be left open as the Transaction would 
not significantly impede effective competition irrespective of the precise geographic 
market definition.382 
The Commission’s assessment  
(377)  The market investigation sug gested that the market for propylene is global,383 as 
there are steady flows of propylene between regions and the supply, demand and 
pricing conditions are influenced by global trends.384 This appears to be particularly 
true for the EEA, where feedstock price differences with other regions make imports 
                                                 
377  Responses to quest ion 4 of Q14 - Questionnaire to competitors and customers of Propylene . 
378  Supplier’s response to question 4 of Q14 - Questionnaire to competitors and customers of Propylene . 
379 Supplier’s response to question 4 of Q14 - Questionnaire to competitors and cus tomers of Propylene . 
380  See, e.g., case COMP/ M.5424 - Dow/Rohm and Haas , decision of 8.01.2009.  
381  See c ase COMP/M.7162 - Ineos/SSG Solvents Business , decision of 5.05.2014.  
382  Form CO, paragraphs 356 -360. 
383  The market investigation strongly indicated tha t a market limited to Western Europe would not be 
appropriate for propylene for the purposes of the present Decision, so it is not considered further in this 
Decision.  
384  Responses to question 5 of Q14 - Questionnaire to competitors and customers of Propyl ene. 
 
 
86 attractive.385 Moreover, the majority of customers considered that supplier’s plants 
outside the EEA could credibly supply customers inside the EEA.386 
(378)  In any event, the Commission considers that, for the purposes of  the present 
Decision, the exact scope of the geographic market definition for propylene can be 
left open, since the Transaction does not raise serious doubts as to its compatibility 
with the internal market, under any plausible geographic market definitio n (i.e. EEA 
or worldwide).  
7.5.1.3. Hexene -1 (C6)  
(379)  Hexene -1 is a type of Linear Alpha Olefin (“LAO”), which are classified by the 
length of the hydrocarbon chain, varying from four carbons (butene -1) to more than 
thirty (expressed as C30+). LAOs have a wide range of  applications. Hexene -1 (C6) 
is primarily used as a co -monomer in the production of some differentiated types of 
polyethylene and EP(D)M.  
7.5.1.3.1.  Product market definition  
The Commission’s precedents  
(380)  In past decisions, the Commission found that LAOs constitute a  separate market, and 
left open the question as to whether LAOs should be further sub -segmented.387 In 
particular, the Commission has not assessed whether hexene -1 forms a separate 
relevant product market.  
The Notifying Party’s view  
(381)  The Notifying Party does  not disagree with the Commission’s precedents.388 
The Commission’s assessment  
(382)  The market investigation indicated that, for the production of polyethylene, hexene -1 
can partially be substituted by other LAOs such as butene -1 and octene -1, but not for 
the syn thesis of other chemicals, where it delivers specific properties to the final 
product.389 In addition, most respondents indicated that no further segmentation of 
hexene -1 is required.390 
(383)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for hexene -1 can be left 
open, since the Transaction does not raise serious doubts as to its compatibility with 
the internal market, under any plausible product market definition (i.e. as a n overall 
LAO market or a narrower market for hexene -1). 
                                                 
385  Responses to question 8 of Q14 - Questionnaire to competitors and customers of Propylene . 
386  Responses to question 7 of Q14 - Questionnaire to competitors and customers of Propylene . 
387  See case COMP/ M.1293 - BP/Amoco , decision of 11 December 1998 and case COMP/M.2299 - BP 
Chemicals/Solvay/HDPE JV , decision of 29.11.2001.  
388  Form CO, paragraph 1419.  
389  Responses to question 3 of Q15 - Questionnaire to competitors and customers of Hexene -1. 
390  Responses to question 4 of  Q15 - Questionnaire to competitors and customers of Hexene -1. 
 
 
87 7.5.1.3.2.  Geographic market definition  
The Commission’s precedents  
(384)  The Commission has not previously considered the geographic scope of a plausible 
market for hexene -1. It has, however, considered that the ge ographic market for all 
LAOs (including hexene -1) would be global or at least EEA -wide.391  
The Notifying Party’s view  
(385)  The Notifying Party submits that the geographic market for the production and sale 
of all LAOs is global or at least EEA -wide in scope, as there are no trade barriers 
globally and especially in the EEA.392 
The Commission’s assessment  
(386)  The Commission’s market investigation confirmed that all LAOs, including hexene -
1, are globally traded with ease and with no major barriers impeding it.393 Suppliers  
indicated that they would be able to easily supply customers within the EEA from 
plants outside it, and customers confirmed that plants outside the EEA can credibly 
sell hexene -1 to customers in the EEA.394  
(387)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the geographic market definition for hexene -1 can be 
left open, since the Transaction does not raise serious doubts as to its compatibility 
with the internal market, under any plausible geographic ma rket definition (i.e. 
EEA-wide or worldwide).  
7.5.1.4. Ethylene propylene terpolymer rubber (EPDM)  
(388)  As explained above in paragraphs (92) onwards, ethylene pr opylene terpolymer 
rubber (“EPDM”) is a synthetic rubber obtained by polymerisation of ethylene and 
propylene in the presence of a diene component. The ethylene -propylene elastomer 
family also comprises another type of rubber, which is ethylene propylene c o-
polymer (“EPM”). For the purposes of the present Decision, EPDM and EPM will 
be referred to jointly as “EP(D)M”. As explained above in paragraphs (95) onwards, 
the exact product and geographic market definitions for EP(D)M can be left open as 
no competitive concerns arise under any product or geographic market definition.  
7.5.2.  Competitive assessment  
5. 7.5.2.1. Ethylene (upstream) with EP(D)M (downstream)  
(389)  The Transaction gives rise to a vertically affected link concerning the supply of 
ethylene (upstream) and the supply of EP(D)M (downstream). Upstream, both 
Parties produce and sell ethylene worldwide and in the EEA. Downstream, both 
Parties also produce an d sell EP(D)M worldwide and in the EEA.  
                                                 
391  See case COMP/M.1293 - BP/Amoco , decision of 11.12.1998 and case COMP/M.2299 - BP 
Chemicals/Solvay/HDPE JV , decision of 29.11.2001.  
392  Form CO, paragraphs 1420 -1421.  
393  Responses to question s 5 and 8 of Q15 - Questionnaire to competitors and customers of Hexene -1. 
394  Responses to questions 6 and 7 of Q15 - Questionnaire to competitors and customers of Hexene -1. 
 
 
88 (390)  According to the Notifying Party’s estimates, this link is vertically affected due to 
the Parties’ combined market shares, downstream, in the supply of EP(D)M in the 
EEA in 2017 and 2016. The combined shares account ed for [30-40]% in 2017 
(Saudi Aramco: [30-40]% ; SABIC: [0-5]%;) and [30-40]%  in 2016 (Saudi Aramco: 
[30-40]% ; SABIC: [0-5]%). The EP(D)M market is not vertically affected if defined 
as worldwide in scope, or when looking at 2018 data.  
(391)  The Notifying Party ’s estimates for the Parties’ and their largest competitors’ market 
shares in the supply of ethylene (upstream) and EP(D)M (downstream) in the EEA 
are shown in Table 6 and Table 18 above.  
The Notifying Party’s view  
(392)  The Notifying Party submits that the combi ned entity would lack the ability or 
incentive to engage in a customer foreclosure strategy .395 This is due to the Parties’ 
relatively low market shares in EP(D)M, the existence of a sufficient customer base 
for ethylene and competition in the upstream marke t for ethylene, and the fact that 
EP(D)M producers represent a small customer base compared to other downstream 
purchasers of ethylene (as only 10% of EEA demand for ethylene comes from the 
EP(D)M industry).  
The Commission’s assessment  
(393)  The relationship bet ween ethylene and EP(D)M would not represent an affected 
market on the basis of the most recently available market shares (i.e. 2018 figures). 
However, the Commission has assessed this link on a conservative basis.  
(394)  Given the Parties’ negligible market sha res in the upstream market for ethylene, and 
consequently the combined entity’s inability to foreclose access to ethylene post -
Transaction, input foreclosure will not be assessed in the present Decision.  
(395)  Regarding potential customer foreclosure risks, the  results of the Commission’s 
market investigation indicated that the combined entity is unlikely to be able to 
successfully engage in any customer foreclosure strategy in relation to ethylene 
rivals through its downstream position in EP(D)M in the EEA.  
(396)  Firstly, as regards ability to foreclose access to EP(D)M customers from ethylene 
rivals, the Parties have a modest position in the downstream market for EP(D)M 
based on the most recent market data (2018). Participants to the market investigation 
generally co nfirmed that the Parties’ market share estimates are largely accurate.396 
In a market with a post -merger HHI below 2 000, and possessing small -to-moderate 
market shares ( [10-20]% (worldwide) and [20-30]% (EEA)), the Notifying Party is 
unlikely to have the ability to foreclose suppliers of a significant downstream 
customer base.397 As outlined in paragraph (355)  above, the combined entity will be 
a small p urchaser of ethylene and many other customers are available, and so is 
unlikely to have the ability to foreclose upstream suppliers.  
                                                 
395  Form CO, paragraphs 1505 -1512.  
396  Responses to questions 11, 12 and 13 of Q4 - Questionnaire to competitors and customers of Ethylene 
propylene terpolymer rubber (EP(D)M) . 
397  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings (2008/C/ 265/07), para graph 25.  
 
 
89 (397)  Secondly, as regards incentive, with a combined market share of [0-5]% worldwide 
and [10-20]% in the EEA in the merchant m arket for ethylene, the Notifying Party 
would not have a significant presence in the upstream market and so its benefits 
from a foreclosure strategy would likely be limited.  
(398)  Thirdly, such a strategy is unlikely to have an adverse impact in the downstream 
market for EP(D)M in the EEA or worldwide. As outlined in paragraph (357)  above, 
there are a number of strong suppliers of ethylene in the EEA, custom ers multi -
source and can switch easily. This lack of impact was confirmed during the market 
investigation, where respondents confirmed that they do not expect the Transaction 
to have any negative impact on prices, quality, choice on innovation for the mark et 
for EP(D)M (or indeed ethylene) in the EEA or worldwide and no material concerns 
were raised regarding either product.398  
(399)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, for the pu rposes of this Decision the Commission 
considers that the Transaction does not raise serious doubts as to its compatibility 
with the internal market in relation to the vertical link between ethylene (upstream) 
with EP(D)M (downstream), regardless of whethe r the market is considered to be 
EEA-wide or worldwide.  
6. 7.5.2.2. Propylene (upstream) with EP(D)M (downstream)  
(400)  Both Parties produce propylene (upstream) and sell it worldwide and in the EEA as 
well as producing EP(D)M (downstream) and selling it worldwide and in the EEA. 
This link is vertically affected in the EEA due to the Parties’ combined market 
shares in EP(D)M in the EEA in 2017 (Saudi Aramco: [30-40]%; SABIC: [0-5]%; 
combined: [30-40]% ) and for 2016 (Saudi Aramco: [30-40]% ; SABIC: [0-5]%; 
combined: [30-40]% ). The Parties’ market shares in EP(D)M for 2018 can be seen in 
Table 6 above.  
                                                 
398  Responses to questions 19 and 20 of Q4 – Questionnaire to competitors and customers of Ethylene 
propylene terpolymer rubber  (EP(D)M) and responses to question 19 and 20 of Q13 - Questionnaire to 
competitors and customers of Ethylene . 

 
 
91 generally confirmed that the Parties’ shares are largely accurate.400 In a market with 
a post -merger HHI below 2 000, and possessing small -to-moderate market shares 
([10-20]% (worldwide) and [20-30]% (EEA)), the Notifying Party is unlikely to 
have the ability to foreclose suppliers of a significant downstream cust omer base.401 
As only a small percentage (less than 2%) of all propylene production is used as an 
input for EP(D)M, the combined entity will be a small purchaser of propylene, and 
so is unlikely to have the ability to foreclose upstream suppliers.402 
(407)  Secondly, as regards incentive, with a combined market share of [0-5]% worldwide 
and [5-10]% in the EEA in the merchant market for propylene, the Notifying Party 
would not have a significant presence in the upstream market, and so its benefits 
from a forec losure strategy would likely be limited.  
(408)  Thirdly, such a strategy is unlikely to have an adverse impact in the downstream 
market for EP(D)M in the EEA or worldwide. This was confirmed during the market 
investigation, where all competitors in the market fo r propylene expressed that they 
expect to continue having access to a sufficient pool of customers post -Transaction, 
and most respondents expressed that they do not expect the Transaction have any 
negative impact on prices, quality, choice or innovation in  the market for EP(D)M 
(or propylene) in the EEA or worldwide.403  
(409)  In light of the above, taking account of the results of the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the vertical link between propylene (upstream) with EP(D)M (downstream), 
regardless of whether the market is considered EEA -wide or worldwide.  
7.5.2.3. Hexene -1 (upstream) with EP(D)M (downstrea m) 
(410)  SABIC produces hexene -1 (upstream) and sells it worldwide and in the EEA. Both 
Parties produce EP(D)M (downstream) and sell it worldwide and in the EEA. This 
link is vertically affected in the EEA due to the Parties’ combined market shares in 
EP(D)M in the EEA in 2017 (Saudi Aramco: [30-40]%; SABIC: [0-5]%; combined: 
[30-40]% ) and for 2016 (Saudi Aramco: [30-40]% ; SABIC: [0-5]%; combined: [30-
40]% ). The Parties’ market shares in EP(D)M for 2018 can be seen in Table 6 above.  
                                                 
400  Responses to questions 11, 12 and 13 of Q 4 - Questionnaire to competitors and customers of Ethylene 
propylene terpolymer rubber (EP(D)M) . 
401  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on  the control of 
concentrations between undertakings (2008/C/ 265/07), paragraph 25.  
402  Form CO, paragraph 1660.  
403  Responses to questions 17 and 18 of Q 14 - Questionnaire to competitors and customers of Propylene ; 
responses to question 20 of Q4 – Questio nnaire to competitors and customers of Ethylene propylene 
terpolymer rubber (EP(D)M).  

 
 
93 as an input for EP(D)M (the majority being used for polyethylene (37%), oxo 
alcohols (16%), and oil field chemicals (7%)), the combined entity will be a small 
purchaser of hexene -1, and so is unlikely to have the ability to foreclose upstream 
suppliers.407   
(416)  Secondly, with a combined market share of [0-5]% worldwide and [5-10]% in the 
EEA in the merchant market for hexene -1, the  Notifying Party would not have a 
significant presence in the upstream market, and so its benefits from a foreclosure 
strategy would likely be limited.  
(417)  Thirdly, such a strategy is unlikely to have an adverse impact in the downstream 
market for EP(D)M in t he EEA or worldwide. Thus, the availability of a significant 
amount of alternative customers would void a customer foreclosure strategy of its 
desired effect. This was confirmed during the market investigation, where all 
competitors in the market for hexen e-1 expressed that they expect to continue having 
access to a sufficient pool of customers post -Transaction, and most respondents 
expressed that they do not expect that the Transaction will have any negative impact 
on prices, quality, choice or innovation in the market for EP(D)M (or hexene -1) in 
the EEA or worldwide.408  
(418)  In light of the above, taking account of the results on the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious  doubts as to its compatibility with the internal market in relation to 
the vertical link between hexene -1 (upstream) with EP(D)M (downstream), 
regardless of whether the market is considered EEA -wide or worldwide.  
7.6. General conclusion on vertical effects  
(419)  In the light of the considerations in paragraphs (239)  to (418)  the Commission 
concludes that the Transaction does not raise serious doubts as to its compatibility 
with the internal market with respect to vertical effects.  
                                                 
407  Form CO, paragraph 2046.  
408  Responses to question 17 and 18 of Q 15 - Ques tionnaire to competitors and customers of Hexene -1; 
responses to question 20 of Q4 – Questionnaire to competitors and customers of Ethylene propylene 
terpolymer rubber (EP(D)M) . 
 
 
94 8. CONCLUSION  
(420)  For the above reasons,  the European 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 o f the EEA Agreement.  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice -President