Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxel les, 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, 5.5.2021 
C(2021)  3334 final  
PUBLIC VERSION 
 
Mitsui & Co., Ltd.  
2-1, Otemachi 1- chome, Chiyoda -ku 
100-8631 Tokyo 
Japan  
 Mitsui Chemicals, Inc.  
Shiodome City Center, 1 -5-2 Higashi -
Shimbashi, Minato -ku   
105-7122 Tokyo 
Japan  
Subject : Case M.10147 – Mitsui & Co / Mitsui Chemicals / Honshu Chemical 
Industry  
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004
1 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 30 March 2021, the Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation  by which Mitsui & Co., 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the ’Merger Regulation’). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union (the ‘TFEU’) has introduced certain changes, such as the replacement 
of ‘Community’ by ‘Union’ and ‘common market’ by ‘internal market’. The terminology of the TFEU 
will be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the ‘EEA Agreement’).  
In the published version of thi s 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information omitted has been replaced by 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 Ltd. (“Mi tsui Bussan”, Japan) and  Mitsui Chemicals, Inc. (“Mitsui Chemicals”, 
Japan) intend to acquire within the meaning of Article 3(1)(b) of the Merger 
Regulation joint control of Honshu Chemical Industry Co., Ltd. (“Honshu 
Chemical” or the “Target”, Japan) (th e “Transaction”). The concentration is 
accomplished by way of purchase of shares. Mitsui Bussan and Mitsui Chemicals 
will be jointly referred to as the “Notifying Parties”. The Target and the Notifying Parties will be referred to as the “Parties”.  
1. T
HE PART IES 
(2) Mitsui Bussan is a global trading organisation which is active in various sectors, including: (i) iron and steel products; (ii) mineral and metal resources; (iii) energy; (iv) machinery and infrastructure; (v) chemical produc ts; (vi) life style; and 
(viii) innovation and corporate development. Mitsui Bussan is headquartered in 
Tokyo, Japan and is listed on the Tokyo Stock Exchange.  
(3) Mitsui Chemicals is engaged in the production and sale of chemical products worldwide. Mitsui Chemicals’ principal business  areas are: (i) mobility products; 
(ii) healthcare products; (iii) food and packaging products; and (iv) basic materials. 
Mitsui Chemicals is headquartered in Tokyo, Japan and is listed on the Tokyo Stock 
Exchange.  
(4) Honshu Chemical is engaged in the product ion and sale of chemical products. 
Honshu Chemical’s principal activities are the production and sale of: (i) 4,4’ biphenol; (ii) cresol derivatives; (iii) electronic materials; and (iv) special bisphenols. Honshu Chemical is headquartered in Tokyo, Japan and is listed on the Tokyo Stock Exchange.  
2. T
HE TRANSACTION  
(5) On 11 November 2020, the Notifying Parties entered into a shareholder agreement pursuant to which Mitsui Bussan and Mitsui Chemicals agreed to acquire joint control of the entire issued share capit al of Honshu Chemical. Pre -Transaction, no 
single person or entity has sole control or joint control over Honshu Chemical (see further para (7) below). Following completion of the Transaction, Mitsui Chemicals 
will own 51% of the issued shares in Honshu Chemical, and Mitsui Bussan will own 
the remaining 49%.  
(6) As decisions in relation to Honshu Chemical’s commercial strategy will require a majority of at least 52% to pass, Mitsui Chemicals or Mitsui Bussan can each block 
decisions requiring a vote by the shareholders. Moreover, Mitsui Chemicals and Mitsui Bussan will each have the right to appoint three of the seven directors to the Board,
3 including one representative director each4 and none of them has a casting 
vote. Finally, each of Mitsui Chemicals and Mitsui Bussan will have the right to veto strategic decisions of the Board including the adoption of Honshu Chemical’s annual 
                                                 
3  The seventh director will be appointed by unanimous consent of the Shareholders Steering Committee. 
The Steering Committee is composed of fou r members, with the Notifying Parties each able to appoint 
two members.  
4  Under Japanese corporate law, only representative directors have the power to “represent” the company in an official capacity (e.g. signing legal documents on behalf of the company) . 
 
 
3 budget and business plan. Honshu Chemical will therefore be jointly controlled by 
Mitsu i Chemicals and Mitsui Bussan.  
(7) The Commission notes that pre -Transaction, Mitsui Bussan and Mitsui Chemicals 
have each already owned  27% of Honshu Chemical, representing […]% each of the 
de-facto voting rights in Honshu Chemical.5 It should be noted that  Mitsui Bussan 
and Mitsui Chemicals belong to separate corporate groups and are ultimately controlled by separate entities. 
 
(8) The Commission’s Consolidated Jurisdictional Notice6 sets out that in the absence of 
specific veto rights, two or more undertakings w ith minority shareholding s may have 
joint control over an enterprise when: (i) the shareholders together hold a majority of 
the voting rights in the target enterprise; and (ii) they act together in exercising these 
voting rights, either as a result of an a greement or on a de facto basis.7 The 
Commission notes that pre -Transaction, neither of Mitsui Bussan and Mitsui 
Chemicals held specific veto rights or had any form of negative control over Honshu 
Chemical. While the first of these two cumulative criteria is fulfilled in the case at 
hand, the second is not, as  (a) there are no agreements or arrangements (either 
formal or informal) between Mitsui Bussan and Mitsui Chemicals to coordinate their 
votes  at Honshu Chemical’s shareholder meetings  and (b)  Mitsui Ch emicals has 
never exercised its right to vote in any of Honshu’s shareholder meetings but has 
instead always delegated its votes to Honshu (although it was not obliged to do so).   
(9) Pre-Transaction, Honshu Chemical  has been  perform ing its operations  on the 
markets where it is active on a lasting basis,  beyond one specific function for either 
of Mitsui Bussan or Mitsui Chemicals and conducting a substantial portion of its 
activities beyond the scope of its sale/purchase relationships with its parents .. 
(10) The Tra nsaction therefore constitutes a concentratio n within the meaning of 
Article  3(1)(b) of the Merger Regulation. 
3. UNION DIMENSION  
(11) The undertakings concerned have a combined aggregate world- wide turnover of 
more than EUR 5 000 million8. Each of them has a Union- wide turnover in excess of 
EUR 250 million, but they do not achieve more than two- thirds of their aggregate 
Union- wide turnover within one and the same Member State.  
                                                 
5  For the avoidance of doubts, each of Mitsui Bussan and Mitsui Chemicals are minority shareholders of 
Honshu Chemical, and neither Mitsui Bussan nor Mitsui Chemicals has any veto rights over any of the 
decisions taken by Honshu Chemical, nor has any of  them has the right to appoint any directors to the 
Board or to appoint any members of Honshu Chemical’s senior management (or to block the appointment 
of any director or any members of Honshu Chemical’s senior management). As a result, neither of Mitsui 
Bussan and Mitsui Chemicals have control over Honshu Chemical pre -Transaction.  
6  Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the 
control of concentrations between undertakings (OJ C 95, 16.4.2008, p. 1; the ‘C JN’).  
7  Paragraphs 74 to 76 of the CJN. In the clear absence of de facto  joint control (given that Mitsui Chemicals 
has never exercised its right to vote in any of Honshu’s shareholder meetings) it is not necessary to assess 
the extent of potential commonality of interest between Mitsui Bussan and Mitsui Chemicals that could be 
indicative of such a situation of de facto  joint control as described in paragraph 76 of the CJN.  
8  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
 
 
4 (12) The Transaction  therefore has a Union dimension  within the meaning of Article 1(2) 
of the Merger Regulation .  
4. RELEVANT MARKETS  
4.1. Introduction  
(13) The Transaction does not give rise to any horizontal overlaps. However, it results in 
a number of vertical relationships between Mitsui Bussan’s and Mitsui Chemicals’ activity in the supply of basic che micals and Honshu Chemical’s activities in the 
supply of special bisphenol for polycarbonate resins and 4,4- biphenol.  
4.2. Market Definitions  
4.2.1.  Special bisphenol for polycarbonate resins  
(14) Special bisphenol for polycarbonate resins are chemicals used as a monomer in the production of polycarbonate resins, either as a substitute for bisphenol A (“Bis -A”, 
whose use in certain applications, such as baby bottles, has been prohibited in many jurisdictions ), or co -polymerised with Bis -A to reinforce polycarbonate resins.  The 
main categories of special bisphenols for polycarbonate resins (representing the majority of special bisphenols for polycarbonate resins commercialised worldwide) are listed in Table 1 below.  
Table 1 Special bisphenols for polycarbonate resin products and their chemical 
name (based on IUPAC Nomenclature)
9 
Special bisphenols for polycarbonate 
resin  Chemical Name (based on IUPAC Nomenclature)  
Bis-Z 4,4'-Cyclohexylidenebisphenol  
BisOC- FL 4,4'-[1-[4-[1-(4-Hydroxyphenyl) -1-
methylethyl]phenyl]ethylidene]bi sphenol  
BisP -AP 4,4'-(1-Phenylethylidene)bisphenol  
BisP -TMC10 4,4'-(3,3,5 -Trimethylcyclohexylidene)bisphenol  
BisP -HTG  4,4'-(3,3,5 -Trimethylcyclohexylidene)bisphenol  
BisP -MIBK 4,4'-(1,3-Dimethylbutylidene)bisphenol  
BisPEO -FL Bisphenoxyethanolfluoren  
                                                 
9  Honshu Chemicals manufactures [ Current sales strategy ] special bisphenol for polycarbonate resins, 
[Current sales strategy] . 
10  BisP -TMC and BisP -HTG are listed in the table above as having the same chemical name.  This is 
because BisP -TMC and BisP -HTG are i n fact the same chemical, although they are treated as separate 
products by Honshu, for commercial reasons.  
 
 
5 Special bisphenols for polycarbonate 
resin  Chemical Name (based on IUPAC Nomenclature)  
S-BOC  4,4'-(1-Methylethylidene)bis(2 -methylphenol)  
TrisP -HAP  4,4',4'' -Ethylidynetrisphenol  
BINOL -DC 2,2'-([1,1' -Binaphthalene] -2,2'-diyldioxy)diacetic acid  
BisP -M 4,4′-(1,3-Phenylenediisopropylidene)bisphenol  
BisP -B 4,4′-sec-Butylidenediphenol  
BisOPPEO -FL 2,2'-[(fluoren -9,9-diyl)bis(bipheny -5,2-diyloxy)]diethanol  
BINOL -2EO 2,2'-([1,1' -binaphthalene] -2,2'-diylbis(oxy))bis(ethan -1-ol) 
Source: Notifying Parties  
4.2.1.1. Product market definition  
(15) The Commission has not yet considered the market for special bisphenols for 
polycarbonate resins (or any other category of bisphenol).  
(16) The Notifying Parties consider that special bisphenols for polycarbonate resins form 
a market which does not include other special bisphenols, such as special bisphenols for epoxy resins (or other bisphenols such as Bis -A), due to their specific properties 
and characteristics as well as the necessity to manufacture them on specific equipment which is  different from that  used for other special bisphenols. In any case, 
if a wider market defini tion for special bisphenols were to be considered, the 
combined market shares of the Parties would not be higher.
11  
(17) The Notifying Parties consider that special bisphenols for polycarbonate resins are 
widely substitutable among them, so that the market does  not require further 
segmentation.12 
(18) As regards potential market definitions broader than the supply of special bisphenols 
for polycarbonate resins , the Commission notes that both demand-  and supply- side 
substitutability between special bisphenol for polyca rbonate resins on the one hand 
and other types of bisphenols or special bisphenols on the other is limited. In particular, as regards demand -side substitutability, special bisphenol for 
polycarbonate resins fulfil specific functions, and provide specific c haracteristics, 
such as heat resistance and durability, to polycarbonate resins that other special bisphenols (or other types of bisphenols), such as special bisphenol for epoxy resins, do not provide.   
(19) As regards a potential  narrow er market definition , distinguishing between each 
individual type of special bisphenol for polycarbonate resin, t he Commission 
observes that while there appears to be some degree of substitutability between 
                                                 
11  Form CO, paragraphs 6.31 to 6.38  
12  Form CO, paragraphs 6.39 to 6.43  
 
 
6 various categories of special bisphenols for polycarbonate resins, impor tant price -
differences among these categories of products would point towards the absence of 
complete  demand- side substitutability, at least for some categories of customers. As 
regards supply- side substitutability, the Commission notes that the Not ifying Parties  
acknowledge that it is not always possible to switch production easily between 
certain  types of special bisphenol for polycarbonate resins (and in particular it is not 
possible to switch production between BisOPPEO -FL and other types of special 
bisphenol for polycarbonate resins).13  
(20) The market investigation did not indicate that the market for special bisphenols for 
polycarbonate resins could be broader, so as to include other special bisphenols, or 
should be further segmented.  
(21) In any event , the Co mmission considers that, for the purpose of this decision, the 
precise question of whether the relevant product market (i) comprises all special 
bisphenols, (ii) comprises only special bisphenols for polycarbonate resins or (iii) is 
segmented between all i ndividual type s of special bisphenols for polycarbonate 
resins listed in paragraph (14) (Table 1) above can be left open, as these  alternative 
product market definitions  do not affect the outcome of the competit ive assessment 
of the Transaction as to its compatibility with the internal market or the functioning 
of the EEA Agreement . 
4.2.1.2. Geographic market definition  
(22) The Commission has not yet considered the market for special bisphenols for 
polycarbonate resins.  
(23) The Notifying Parties submit that the geographic market for special bisphenols for 
polycarbonate resins is global given that: (i) suppliers are active globally from production facilities across the world; (ii) customers in the EEA are supplied from facilities located in other world regions; and (iii) there are no regulatory or other 
barriers preventing a new or existing supplier located outside the EEA from 
supplying customers located within the EEA.
14 
(24) The Commission observes that special bisphenols for polycarb onate resins are rather 
expensive non- hazardous speciality chemical products, with low unit transport costs. 
These elements could point towards a potential global market for such products. The 
market investigation did not provide any indications pointing t owards either 
plausible alternative potential geographic market definition s (i.e. EEA -wide or 
worldwide) for special bisphenols for polycarbonate resins.  
(25) In any event, for the purpose of assessing the Transaction, the exact scope of the 
geographic market definition can be left open since the above -mentioned plausible 
alternative geographic market definitions (EEA -wide or worldwide), do not affect 
the outcome of the competitive assessment of the Transaction as to its compatibility 
with the internal market or the functioning of the EEA Agreement .  
                                                 
13  Form CO, paragraph 6.41  
14  Form CO, paragraphs 6.64 and 6.65  
 
 
7 4.2.2. 4,4’ biphenol  
(26) 4,4’ biphenol is an organic compound and is a derivative of biphenyl, which is used 
to produce liquid crystal polymers (a key raw material in components for computers and electronic devices) and polyph enylsulfone (a polymer used in medical 
equipment and plumbing systems). 
4.2.2.1. Product market definition  
(27) The Commission has not yet considered the market for 4,4’ biphenol.  
(28) The Notifying Parties consider that 4,4’ biphenol forms part of a market which does 
not i nclude other biphenols such as 2,2’ biphenol, due the differences of specific 
properties, characteristics (such as melting temperature)  and uses of the two products, as well as the necessity to manufacture 4,4’ biphenol on specific 
equipment.
15 In any case , if a wider market definition for biphenol were to be 
considered, the combined market shares of the Parties would be lower.  
(29) The Commission observes that 4,4’ biphenol is not substitutable from either a 
demand- side or a supply side with any other chemical product (such as e.g. 2,2’ 
biphenol). In addition, there is no further differentiation based on grade, application, quality or concentration within 4,4’ biphenol products. The market investigation did not provide any indication that the relevant product ma rket should be defined as 
being narrower or broader than 4,4 biphenol.  
(30) As a result, the Commission considers that, for the purpose of this decision, 4,4 biphenol constitutes a relevant product market.  
4.2.2.2. Geographic market definition  
(31) The Commission has not yet considered the market for 4,4’ biphenol.  
(32) The Notifying Parties submit that the geographic market for 4,4’ biphenol is global 
given that: (i) suppliers are active globally from a limited number of production facilities, and in particular the United States of America and India; (ii) customers in the EEA are regularly supplied from facilities outside of the EEA in various locations around the world; and (iii) there are no regulatory or other barriers preventing a new or existing supplier located outside the EEA from supplying 
customers located within the EEA.
16 
(33) The Commission notes that 4,4’ biphenol is a non- hazardous speciality chemical 
products, that is actively traded around the world. There are tariffs applied to imports 
of 4,4’ biphenol from outside the EEA, nonetheless, these represent only 5.5% of the 
sale price, and these tariffs do not apply to Japanese suppliers, as a result of the EU -
Japan trade agreements. These elements could point towards a potential global 
market for 4,4’ biphenol. The market investigation did not provide any indications 
pointing towards either plausible alternative potential geographic market definition 
(i.e. EEA -wide or worldwide) for 4,4 biphenol.  
(34) In any event, for the purpose of assessing the Transaction, the exact scope of the 
geographic market definition can be left open since the above -mentioned plausible 
                                                 
15  Form CO, paragraphs 6.47 and 6.48  
16  Form CO, paragraph 6.67  
 
 
8 alternative geographic market definitions (EEA -wide or worldwide), do not affect 
the outcome of the competitive assessment of the Transaction as to its compatibility 
with the internal market or the functioning of the EEA Agreement .  
4.2.3. Methyl isobutyl ketone (“MIBK”)  
(35) MIBK is an organic solvent used among other in paints, coatings, adhesives, in the production of tires as well as in the pharmaceutical industry as an extracti on 
material.  
4.2.3.1. Product market definition  
(36) The Commission has not yet considered the market for MIBK.  
(37) The Notifying Parties submit that MIBK should be considered as one single product 
market, due to the absence of alternatives to MIBK in most applications. I n addition, 
MIBK is generally manufactured in dedicated facilities that use a specialised 
equipment to this end.
17  
(38) The Commission observes that MIBK is not substitutable from either a demand -side 
or a supply side with any other chemical product. In addition, there is no further 
differentiation based on grade, application, quality or concentration within MIBK. The market investigation did not provide any indication that the relevant product market should be defined as being narrower or broader than MIBK.  
(39) As a result, the Commission considers that, for the purpose of this decision, MIBK 
constitutes a relevant product market.  
4.2.3.2. Geographic market definition  
(40) The Commission has not yet considered the market for MIBK.  
(41) The Notifying Parties submit that the geograph ic market for MIBK is at least EEA -
wide.
18 
(42) The Commission notes that (i) there are significant differences between EEA and non-EEA prices for MIBK, (ii) the transportation costs associated with importing 
MIBK into the EEA are significant (10 -12%)  and (iii) in addition, some tariffs 
(0-5%) may  as well  apply to imports of MIBK into the EEA . These elements could 
point towards a potential EEA -wide market for MIBK.  The market investigation did 
not provide any indications pointing towards either plausible alterna tive potential 
geographic market definition ( i.e. EEA -wide or worldwide) for MIBK. In any event, 
for the purpose of assessing the Transaction, the exact scope of the geographic market definition can be left open since the  above -mentioned plausible alternat ive 
geographic market definitions (EEA -wide or worldwide), do not affect the outcome 
of the competitive assessment of the Transaction as to its compatibility with the internal market or the functioning of the EEA Agreement .  
                                                 
17  Form CO, paragraphs 6.58 and 6.59  
18  Form CO, paragraph 6.71  
 
 
9 4.2.4. Acetone  
(43) Acetone is a widely used colourless solvent with a characteristic smell. It is also 
used as a raw ingredient in the manufacture of a wide variety of chemical products.  
4.2.4.1. Product market definition  
(44) In previous decisions , the Commission identified a separate product market for 
aceton e.19  
(45) The Notifying Parties agree with the Commission’s view regarding the market 
definition for acetone.20 
(46) The Commission observes that acetone is not substitutable from either a demand -
side or a supply side with any other chemical product. In addition, ace tone is a 
uniform chemical product, which does not have different grades. The market 
investigation did not provide any element suggesting that the Commission should depart from its past decisional practice with respect to the relevant product market 
defini tion for acetone.  
(47) As a result, the Commission considers that, for the purpose of this decision, acetone 
constitutes a relevant product market.  
4.2.4.2. Geographic market definition  
(48) In previous decisions , the Commission considered the geographic market for acetone 
to be EU -wide.
21 
(49) The Notifying Parties submit that the geographic market for acetone is at least EEA -
wide.22 
(50) The Commission notes that (i)  the transportation costs associated with importing 
acetone into the EEA are significant (up to 20%)  and (ii) in addition some tariffs 
(0-6%) may as well apply to imports of acetone into the EEA . These elements could 
point towards a potential EEA -wide market for acetone.  The market investigation 
did not provide any element suggesting that the Commission should depart from i ts 
past decisional practice with respect to the relevant geographic market for acetone.  
(51) In any event, for the purpose of assessing the Transaction, the exact scope of the geographic market definition can be left open since the above -mentioned plausible 
alternative geographic market definitions (EEA -wide or EU -wide), do not affect the 
outcome of the competitive assessment of the Transaction as to its compatibility 
with the internal market or the functioning of the EEA Agreement .
23 
                                                 
19  See Cases M.3024 – Bain Capital / Rhodia , decision of 19 December 2002; M.5712 –  Mitsubishi 
Chemical Holdings / Mitsubishi Rayon Co , deci sion of 25 February 2010; and Case M.6171 –   IPIC / 
CEPSA, decision of 5 July 2011.  
20  Form CO, paragraph 6.52  
21  See Cases M.3024 – Bain Capital / Rhodia , decision of 19 December 2002; M.5712 –  Mitsubishi 
Chemical Holdings / Mitsubishi Rayon Co , decision of 25 February 2010; and Case M.6171 –   IPIC / 
CEPSA, decision of 5 July 2011.  
22  Form CO, paragraph 6.68  
23  The Commission notes that the Notifying Parties have only provided EEA market shares (instead of EU 
market shares) for acetone. Nonetheless, the No tifying Parties confirmed that their market shares for 
 
 
 
10 4.2.5. Methanol  
(52) Methanol is a liqu id petrochemical derived (amongst other processes) from natural 
gas and used in the production of resins for building materials and engineering 
plastics; as well as in fuel applications, in particular the production of unleaded gasoline.  
4.2.5.1. Product market def inition  
(53) In previous decisions , the Commission identified a separate product market for 
methanol.
24  
(54) The Notifying Parties agree with agree with the Commission’s view regarding the 
market definition for methanol.25 
(55) The Commission observes that methanol is not  substitutable from either a demand -
side or a supply side with any other chemical product. In addition, methanol is a 
uniform chemical product, which does not have different grades. The market 
investigation did not provide any element suggesting that the C ommission should 
depart from its past decisional practice with respect to the relevant product market 
definition for methanol.  
(56) As a result, the Commission considers that, for the purpose of this decision, 
methanol constitutes a relevant product market.  
4.2.5.2. Geographic market definition  
(57) In previous decisions , the Commission considered that, although methanol is 
internationally traded as a commodity (as it can be profitably transported over long 
distances) the market is not worldwide in scope as conditions of com petition vary 
between the three main demand areas of the world (Western Europe, North America and Asia), principally due to differences in demand patterns and significant import 
duties in each region.
26 
(58) The Notifying Parties submit that the geographic marke t for methanol is EEA -
wide.27 
(59) The Commission notes that (i) the transportation costs associated with importing 
methanol into the EEA are significant (up to 20%) and (ii) in addition some tariffs 
(0-5.5%) may as well apply to imports of methanol into the EEA . These elements 
would point towards a potential EEA -wide market for methanol.  The market 
investigation did not provide any element suggesting that the Commission should depart from its past decisional practice with respect to the relevant geographic mark et for methanol.  
                                                                                                                                                      
acetone (both volume -based and value -based) at EU level would not differ substantially from their market 
shares for acetone at the EEA level.  
24  See Cases M.331 – Fletcher Challenge / Methanex , decisio n of 31 March 1993; M. 1813 – Industri 
Kapital/(Nordkem)/Dyno,  decision of 12.07.2017; and M.4737 –  SABIC / GE Plastics , decision of 
2 August 2017.  
25  Form CO, paragraph 6.55  
26  See Cases M.331 – Fletcher Challenge / Methanex , decision of 31 March 1993; M.  1813 – Industri 
Kapital/(Nordkem)/Dyno,  decision of 12.07.2017; and M.4737 –  SABIC / GE Plastics , decision of 
2 August 2017.  
27  Form CO, paragraph 6.70  
 
 
11 (60) As a result, the Commission considers that, for the purpose of this decision, the 
market for methanol is EEA -wide.  
5. COMPETITIVE ASSESSMEN T 
5.1. Overview of affected markets  
(61) The Transaction does not give rise to any horizontally affected markets . However, 
the Transaction gives rise to the creation of four affected vertical links, as 
summarised in Table 2 below:28 
Table 2: Vertically affected markets  
 
Upstream products  Downstream product  Reason why the link is vertically affected  
Acetone  Special b isphenols 
for polycarbonate 
resins  Affected downstream , because Honshu 
Chemical’s estimated market share in the 
sale of special bisphenol for polycarbonate 
resins is approximately [30-40]% at 
worldwide level and [60-70]% at EEA level  MIBK”  
Methanol  
Methanol  4,4’ biphenol  Affected downstream , because Honshu 
Chemical’s estimated market share in the 
sale of 4,4’ biphenol is approximately [50-
60]% at EEA level  
 
(62) Only Honshu Chemical is active in the supply of special bisphenols for polycarbonate resins  and 4,4’ biphenol, with market shares above 30% at either 
worldwide or EEA level. As regards the upstream products (namely acetone, methanol and MIBK), these are sold by both Notifying Parties, but not by Honshu Chemicals. The Notifying Parties’ market sh are in the supply of the upstream 
products are very limited. The Parties’ and their competitors’ market shares in the supply of special bisphenols for polycarbonate resins, 4,4’ biphenol, MIBK, acetone and methanol are presented below in Tables 3 to 7 resp ectively.  
                                                 
28  In addition to the four affected vertical links described in this table, the Commission notes that:  
 (i) both Mitsui Bussan and Mitsui Chemicals are active in the sale of caustic soda, which is also an input 
for the manufacture of special bisphenol for polycarbonate resins as well as of 4,4’ biphenol. However, 
none of them supplies caustic soda in the EE A. While the Commission has consistently held that the 
relevant geographic market for caustic soda was the EEA, in case M.9756 –  Nouryon/CP Kelco, the 
Commission also envisaged the possibility that the relevant geographic market for caustic soda could be worldwide in scope. While the market investigation in that case seems to exclude this possibility, the 
Commission ultimately left the geographic market definition open. At any rate, no risks of customer or 
input foreclosure arise as a result of Honshu Chemi cal’ strong position in the supply of the relevant 
downstream products, as Honshu Chemical’s purchase shares for caustic soda would be less than [0-5]% 
at both EEA and global level.  
 (ii) Honshu Chemical is also active in the sale of additives for photores ists for g/i -Line (“APG”). 
However, Honshu Chemical has no sales of this product in the EEA, and the Notifying Parties claim that 
there are no customers for this product in the EEA. The Notifying Parties also confirmed that “ they do not 
believe that Honshu  Chemical’s shares are likely to exceed 30% on a worldwide basis” . Nonetheless, 
even if this were to be the case, the Notifying Parties confirmed that (a) the Parties’ market shares in the 
supply of all relevant inputs for the manufacture of APG would rema in below [0 -5]% and (b) Honshu 
Chemical’s purchase shares for each of these products would be less than [0-5]%. As a result, no risk of 
either input or customer foreclosure would arise even if Honshu Chemical had a strong position in the 
supply of APG.  
 
 
12 Table 3: Market share estimates for the supply of special bisphenol for polycarbonate 
resins, 2019  
Supplier  Worldwide  EEA  
Volume shares  Value shares  Volume shares  Value shares  
Honshu Chemical  [30-40]% <[30-40]% [60-70]% <[60-70]% 
Rheine Chem ie 0 – 5% Not provided  [0-5]% Not provided  
Deepack Nitrite  [10-20]% Not provided  [30-40]% Not provided  
Taoka Chemical Co., 
Ltd [30-40] % Not provided  - Not provided  
Others  5 – 10% Not provided  - Not provided  
Total  100%  100%  100%  100%  
Source: Notifying Parties’ estimates  
Table 4: Market share estimates for the supply of 4,4’ biphenol, 2019 
Supplier  Worldwide  EEA  
Volume shares  Value shares  Volume shares  Value shares  
Honshu Chemical  [20-30]% <[20-30]% [50-60]% <[50-60]% 
SI Group, Inc.  [50-60]% Not pro vided  [30-40]% Not provided  
Others  [20-30]% Not provided  [20-30]% Not provided  
Total  100%  100%  100%  100%  
Source: Notifying Partie s’ estimates  
Table 5: Market share estimates for the supply of MIBK, 2019  
Supplier  Worldwide  EEA  
Volume shares  Value share s Volume shares  Value shares  
Mitsui Chemicals  [5-10]% [5-10]% [0-5]% [0-5]% 
Mitsui Bussan  [0-5]% [5-10]% [0-5]% [0-5]% 
Combined  [10-20]% [10-20]% [0-5]% [0-5]% 
Shell Netherlands 
Chemie BV  Not provided  Not provided  [40-50] % [30-40] % 
Arkema Group  Not pr ovided  Not provided  [10-20]% [10-20]% 
Others  Not provided  Not provided  [30-40]% [60-70]% 
Total  100%  100%  100%  100%  
Source: Notifying Parties’ estimates  
Table 6: Market share estimates for the supply of acetone, 2019  
Supplier  Worldwide  
(for illustration,  not a relevant market)  EEA29 
Volume shares  Value shares  Volume shares  Value shares  
Mitsui Chemicals  [0-5]% [0-5]% - - 
Mitsui Bussan  [0-5]% [0-5]% [0-5]% [0-5]% 
Combined  [0-5]% [0-5]% [0-5]% [0-5]% 
INEOS Phenol GmbH  [10-20]% [10-20]% [60-70]% 50 – 60% 
Cepsa Química 
Bécancour  Not provided  Not provided  [20-30] % 10 – 20% 
Versalis S.p.A.  Not provided  Not provided  [10-20]% 10 – 20% 
Total  100%  100%  100%  100%  
Source: Notifying Parties’ estimates  
 
                                                 
29  The Notifying Parties have only provided EEA market shares (instead of EU market shares) for acetone. 
Nonetheless, the Notifying Parties confirmed that their market shares for acetone (both volume -based and 
value -based) at EU level would not differ substa ntially from their market shares for acetone at the EEA 
level.  
 
 
13 Table 7: Market share estimates for the supply of methanol,  2019 
Supplier  Worldwide  
(for illustration, not a relevant market)  EEA  
Volume shares  Value shares  Volume shares  Value shares  
Mitsui Chemicals  [0-5]% [0-5]% - - 
Mitsui Bussan  [0-5]% [0-5]% [0-5]% [0-5]% 
Combined  [0-5]% [0-5]% [0-5]% [0-5]% 
Methanex co rporation  [5-10]%  [10-20]% [20-30]% [20-30]% 
Oman Methanol 
Company LCC  Not provided  Not provided  0 - 5% 0 - 5% 
OCI Beaumont LCC  Not provided  Not provided  0 - 5% 0 - 5% 
Others  [80-90]% [70-80]% 65 – 80% 65 – 80% 
Total  100%  100%  100%  100%  
Source: Notif ying Parties’ estimates  
5.2. Vertical  link between acetone, methanol or MIBK (upstream) and special 
bisphenol for polycarbonate resins (downstream)  
5.2.1. The Notifying Parties’ view  
(63) As regards potential input foreclosure concerns , the Notifying Parties point to their  
very low combined market  shares30 in the three upstream markets of acetone, 
methanol and MIBK, as well as to the presence in each of these markets of a large 
number of alternative suppliers (with market shares higher than those of the Notifying Parties, se e Tables 5 – 7 above).  
(64) Therefore
, the Notifying Parties conclude that the merged entity would not have the 
ability  to engage in a customer foreclosure strategy.  
(65) The Notifying Parties also stress that they would have no incentive to engage in a 
customer for eclosure strategy, i.e.  to reduce or restrict sales of upstream inputs of 
acetone, methanol and MIBK  to Honshu’s downstream, competitors  since these 
downstream competitors would simply source the relevant inputs from one of the many strong competitors of  the Notifying Parties in the relevant upstream markets.  
(66) These upstream competitors of the Notifying Partie s are collectively responsible for 
more than [90 -100]% of the supply in each of the upstream markets, and would 
easily have sufficient capacity to su pply all downstream manufacturers of special 
bisphenol for polycarbonate resins in the event of any attempted foreclosure by the Notifying Parties.  As a result, any potential input foreclosure strategy would have 
the only effect of causing losses to the No tifying Parties upstream, and there would 
be no subsequent increase in sales by Honshu Chemical downstream, since Honshu  
Chemical ’s competitors would be able to easily source their  upstream inputs from 
the Notifying Parties’ upstream competitors.
31 
(67) These facts, according to the Notifying Parties, are such that the combined entity will have neither the ability , nor the incentive  to engage in any input foreclosure 
strategy following the Transaction, since Honshu Chemical’s competitors in the supply of special bisphenol for polycarbonate resins will have the possibility to source the upstream inputs from any of the Notifying Parties’ many competitors in 
                                                 
30  Form CO, paragraphs 6.96 to 6.101.  
31  Notifying Parties’ response to the Commission’s RFI7, paragraphs 1.2 to 1.5  
 
 
14 the upstream markets. These upstream competitors are collectively responsible for 
more than [90 -100]% of the s upply in each of the upstream markets.  
(68) As regards potential customer foreclosure concerns,32 the Notifying Parties observe 
that the entirety of Honshu’s supplies of acetone, methanol and MIBK, [Current production and procurement strategy] , is sourced [Curr ent production and 
procurement strategy] . Moreover , Honshu Chemical sources [Current production 
and procurement strategy] , which means that there can be no customer foreclosure as 
a result of the Transaction with respect to MIBK.  
(69) Finally, for each of acet one, methanol and MIBK, Honshu Chemical accounts for 
less than [0-5]% of the purchasing market for the relevant upstream inputs globally 
and in the EEA, as all three of these products are also used for the manufacture of many other products, distinct from special bisphenol for polycarbonate resins. Therefore, there are numerous other potential purchasers of these inputs other than Honshu Chemical. 
(70) Therefore, the Notifying Parties conclude that the merged entity would not have the ability  to engage in a cust omer foreclosure strategy.  
(71) The Notifying Parties also stress that they would have no incentive to engage in a 
customer foreclosure strategy. If Honshu Chemical were to reduce its purchases of 
the relevant upstream inputs from the Notifying Parties’ competi tors, given Honshu  
Chemical ’s de minimis share of purchases, there would be no effect on the upstream 
competitors’ competitive viability or profitability; they would simply supply their products to the many other available customers representing over [90 -100]% of the 
share of purchases.  
(72) The Notifying Parties conclude that the only consequence of any customer 
foreclosure attempt from their side would be to limit Honshu  Chemical ’s potential 
sources of supply for the upstream inputs. This restriction on Honshu Chemical ’s 
procurement abilities would be likely to increase Honshu Chemical ’s costs and so 
decrease profitability , without generating any subsequent gains for the Notifying 
Parties at upstream level .
33 
(73) As regards the definition of potential narrower marke ts for each individual type of 
special bisphenol for polycarbonate resins (e.g. BisPEO -FL), the Notifying Parties 
state that Honshu Chemical’s market share in the supply of special bisphenol for 
polycarbonate resins overall is “ likely to be broadly represe ntative ” of its shares 
with respect to the individual special bisphenol for polycarbonate resins that it 
supplies.34 However, the Notifying Parties submit that there is no available data that 
could allow to estimate Honshu Chemical’s shares of individual special bisphenol 
for polycarbonate resins. The Notifying Part ies observe as well that the relevant 
upstream products are homogeneous, indistinguishable products, which Honshu Chemical purchases [Current procurement strategy]  for use in the manufacture of 
special bisphenols as well as several other products.
35 
                                                 
32  Form CO, paragraphs 6.102 to 6.106.  
33  Notifying Parties’ response to the  Commission’s RFI7, paragraphs 1.8 to 1.13  
34  Form CO, paragraph 6.88  
35  Form CO, paragraph 6.41  
 
 
15 (74) Consequently, according to the Notifying Parties, there is no prospect of customer 
foreclosure with respect to any of the input products required to manufacture any special bisphenol for polycarbonate re sins. 
5.2.2. The Commission’s assessment  
(75) The Commission considers that none of the  three vertical relationships in question 
would give rise to input foreclosure concerns , 
(i) for lack of ability, in light of the 
Parties’ limited market shares  upstream in the supply of acetone, methanol and 
MIBK, as well as the presence of a large number of alternative suppliers for each of these inputs , and (ii) for lack of incentives , given  that, in the absence of ability, such 
an input foreclosure strategy would only lead to a reduction  of the combined entity ’s 
profitability  as a consequence of  lost sales in the upstream market with no sales  
increase in the downstream market . 
(76) Given that the combined entity would not have the ability  or the incentives  to engage 
in an input forec losure strategy, it is not necessary for the Commission to assess the 
potential impact  of such a foreclosure strategy on effective competition.  
(77) For the reasons outlined below, t he Commission considers as well that the 
Transaction does not give rise to any customer foreclosure concerns.  
(78) The Commission considers that the combined entity would not have the  ability  to 
engage in customer foreclosure strategies, in light of the fact that acetone, methanol 
and MIBK are very common chemicals, each one of them havi ng a number of uses 
other than the manufacture of special bisphenol for polycarbonate resins. Honshu Chemical’s purchase shares for each of these products would be less than [0 -5]% at 
both EEA and global level, such that the upstream rivals of the Notifying Parties will continue to have access to over [90 -100]% of the worldwide and EEA customer 
bases for acetone, methanol and MIBK post -Transaction. In addition, as regards 
MIBK specifically, the Commission notes that Honshu Chemical already sources the [Curr ent procurement strategy] , so that there are [Current production and 
procurement strategy]  to foreclose in that respect.  
(79) Concerning the Notifying Parties ’ incentive to engage  in a customer foreclosure 
strategy, the Commission concludes that the combined entity  would have no 
incentive to pursue a customer foreclosure strategy since this would not lead to an increase in profitability in either the upstream or downstream markets, and would rather likely lead to a  decrease in the overall  profitability of the me rged entity as a 
result of  a reduction in available sources of supply for  Honshu Chemical .  
(80) Given that the combined entity would not have the ability  or the incentives  to engage 
in a customer foreclosure strategy, it is not necessary for the Commission to assess the potential impact  of such a foreclosure strategy on effective competition.  
(81) The Commission observes that this analysis would not change in the event that potential alternative market definitions were considered for special bisphenols for polycarbonate resins, namely:  
(a) as regards a hypothetical broader  market for the supply of all special 
bisphenols, the Notifying Parties estimate that Honshu Chemical’s market share would also be no higher than [30 -40]% at worldwide level, and circa 
50-60% at EEA lev el. Notably, Honshu Chemical does not supply special 
bisphenols other than special bisphenols for polycarbonate resins in the EEA. 
 
 
16 The relevant affected upstream markets for all special bisphenols, are the 
same as for the narrower  sub-segment of special bi sphenols for polycarbonate 
resins. As a result, no customer foreclosure concerns arise, because the combined entity would not have the ability  to engage in customer foreclosure 
strategies, in  the same fashion as described above  (see paragraph (78) ). Same 
as above  (see paragraph  (79)), the combined entity would also have no 
incentive to engage in  a customer foreclosure strategy, since the overall 
financial impact of such a customer foreclosure strategy  would be detrimental 
to it. Same as above (see paragraph (80) ), given that the combined entity 
would not have the ability  or the incentives  to engage in a customer 
foreclosure stra tegy, it is not necessary for the Commission to assess the 
potential impact  of such a foreclosure strategy on effective competition.  
(b) as regards the definition of potential narrower  markets for each individual 
type of special bisphenol for polycarbonate res ins ( e.g. BisPEO -FL), as 
mentioned above, the Notifying Parties state that Honshu Chemical’s market share in the supply of special bisphenol for polycarbonate resins overall is 
“likely to be broadly representative”
36 of its shares with respect to the 
indivi dual special bisphenol for polycarbonate resins that it supplies. In any 
event, as Honshu Chemical’s purchase shares for each of the relevant 
upstream product would be less than [0 -5]% at both EEA and global level, 
and as these upstream products are homoge neous, indistinguishable products, 
which Honshu Chemical purchases [Current procurement strategy]  for use in 
the manufacture of special bisphenols as well as several other products, customer foreclosure concerns can be excluded , for lack of ability,  
irresp ective of the precise segmentation of the downstream products and 
irrespective of Honshu Chemical’s precise market share in any potential downstream sub- market  (see paragraph (78) (77)). Same as above (see 
paragraph(79) ), customer foreclosure concerns can be excluded, for lack of 
incentive, since the overall financial impact of such a customer foreclosure strategy would be detri mental to it. Same as above (see paragraph (80) ), 
given that the combined entity would not have the ability  or the incentives  to 
engage in a customer foreclosure strategy, it is not necessary for the Commission t o assess the potential impact  of such a foreclosure strategy on 
effective competition.  
(82) In light of 
the above, the Commission considers that the Transaction does not raise 
serious doubts  as to its compatibility with the internal market or the functioning of  
the EEA Agreement in relation to the vertical link between acetone, methanol or MIBK (upstream) and special bisphenol for polycarbonate resins (downstream) , 
under any plausible geographic market definition.  
5.3. Vertical  link between methanol (upstream) and 4 ,4’ biphenol (downstream)  
5.3.1. The Notifying Parties’ views  
(83) As 
regards  potential input foreclosure concerns , the Notifying Parties underline that 
their combined share in the supply of methanol (which is an input for the manufacturing of 4,4’ biphenol) is extrem ely low (below [0-5]% in the EEA and 
                                                 
36  Form CO, paragraph 6.88  
 
 
17 worldwide, see table 7). The presence of many other suppliers competing with the 
Notifying Parties for the supply of methanol  is such that any input foreclosure 
strategy they might attempt to engage in will not succeed.37 
(84) Therefore, the Notifying Parties conclude that the merged entity would not have the 
ability  to engage in a customer foreclosure strategy.  
(85) The Notifying Parties also stress that they would not have the incentive  to engage in 
a potential input foreclosure strategy. The Notifying Parties have a de minimis share 
(<[0-5]%) in the EEA with respect to the supply of methanol. Their competitors 
upstream are collectively responsible for more than [90 -100]% of the supply of 
methanol (which is a commodity product use d across a variety of applications) and 
would easily have sufficient capacity to supply all d ownstream manufacturers of 
4,4’ biphenol in the event of any attempted foreclosure by the Notifying Parties . No 
manufacturer of 4,4’ biphenol is reliant on the Not ifying Parties  with respect to their 
supply of methanol.  
(86) The Notifying Parties conclude that the only consequence  of any input foreclosure 
attempt on their side would be a loss of sales for them upstream. These losses would not be compensated by any subsequent increase in sales of 4,4’ biphenol by Honshu 
Chemical downstream, since Honshu Chemical’s competitors would be able to 
easily source their methanol requirements from the Notifying Parties’ competitors.
38 
(87) As regards  potential customer foreclosure concer ns,39 the Notifying Parties argue 
once again that Honshu Chemical’s total share of purchase of methanol is less than 
[0-5]%.40 Moreover, methanol is used for many other uses apart from the 
manufacture of 4,4’ biphenol.  
(88) Therefore, the Notifying Parties concl ude that the merged entity would not have the 
ability  to engage in a customer foreclosure strategy.  
(89) The Notifying Parties also stress that they would have no incentive to engage in a 
customer foreclosure strategy. If Honshu Chemical were to reduce its purc hases of 
methanol  from the Notifying Parties’ competitors, given Honshu Chemical’s de 
minimis share of purchases, there would be no effect on the upstream competitors’ competitive viability or profitability; they would simply supply their products to the many other available customers representing over [90 -100]% of the share of 
purchases.  
(90) The Notifying Parties conclude that the only consequence of any customer foreclosure attempt from their side would be to limit Honshu Chemical’s potential sources of suppl y for the upstream inputs. This restriction on Honshu Chemical’s 
procurement abilities would be likely to increase Honshu Chemical’s costs and so decrease profitability, without generating any subsequent gains for the Notifying Parties at upstream level.
41 
                                                 
37  Form CO, paragraphs 6.135 to 6.138  
38  Notifying Parties’ response to the Commission’s RFI7, paragraphs 1.24 to 1.27  
39  Form CO, p aragraphs 6.139 to 6.145.  
40  [90-100]% of which are made in Japan.  
41  Notifying Parties’ response to the Commission’s RFI7, paragraphs 1.28 to 1.32  
 
 
18 (91) Therefore the Notifying Parties conclude that any customer foreclosure strategy 
attempted by the Notifying Parties will not be successful.  
5.3.2. The Commission’s assessment  
(92) The Commission considers that this vertical relationship would give rise to no input 
foreclosure concerns, (i) for lack of ability , in light of the Parties’ limited market 
share upstream in, as well as the presence of a large number of alternative suppliers for, the supply of methanol , 
and (ii) for lack of incentive, since such a strategy  would 
lead to a reduced profitability of the combined entity as a result of  lost sales in the 
upstream market , which would not be compensated by any sales increase in the 
downstream market . 
(93) Given that the combined entity would not have the ability  or the incentives  to engage 
in an input foreclosure strategy, it is not necessary for the Commission to assess the potential impact  of such a foreclosure strategy on effective competition.  
(94) For the reasons outlined below, the Commission considers as well that the Tran saction does not give rise to any customer foreclosure concerns.  
(95) The Commission considers that the combined entity would not have the ability to 
engage in customer foreclosure strategies, in light of the fact that methanol is a very 
common chemical, which  has a number of uses oth er than the manufacture of 
4,4’ biphenol. Honshu Chemical’s purchase shares would be less than [0 -5]% in the 
EEA and global level, such that the Notifying Parties’ upstream rivals will continue to have access to over [90-100]% of t he worldwide and EEA customer bases for 
methanol post -Transaction.  
(96) The Commission also  considers that the Notifying Parties would have no incentive to 
pursue a customer foreclosure strategy since this would not lead to an increase in 
profitability in eith er the upstream or downstream markets, and would rather likely 
lead to a decrease in the overall profitability of the merged entity as a result of a reduction in available sources of supply for Honshu Chemical.  
(97) Given that the combined entity would not have the ability  or the incentives  to engage 
in a customer foreclosure strategy, it is not necessary for the Commission to assess the potential impact  of such a foreclosure strategy on effective competition.  
(98) In light of the above, the Commission considers tha t the Transaction does not raise 
serious doubts  as to its compatibility with the internal market or the functioning of 
the EEA Agreement in relation to the vertical link between methanol (upstream) and 4,4’ biphenol (downstream) , under any plausible geogra phic market definition.  
5.4. Conglomerate effects  
(99) The Commission considers that the Transaction does not raise serious doubts as to its 
compatibility with the internal market or the functioning of the EEA Agreement in 
relation to potential conglomerate effects involving product sold by Honshu 
Chemical in the one hand and either of the Notifying Parties on the other hand. 
 
 
19 6. CONCLUSION  
(100)  For the above reasons, the European Commission decide s not to oppose the 
Transaction  and to declare  it compatible with the internal market and with the EEA 
Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger 
Regulation and Article 57 of the EEA Agreement. 
For the Commission  
  (Signed)  
Margrethe VESTAGER  
Executive Vi ce-President