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,  15.7.2022  
C(2022 ) 5210 final  
PUBLIC VERSION  
 
SK Capital  Partners LP  
430, Park Ave  
New York, NY 10022  
United States  of America  
Subject : Case M.10725 – SK CAPITAL PARTNERS / POLYMER ADDITIVES 
HOLDINGS  
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 10 June 2022 , the Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which  SK Capital 
Partners LP (“SK Capital” , USA ) acquires within the meaning of Article 3(1)(b) of 
the Merger Regulation sole control of  the whole of Polymer Additives Holdings 
Inc. (together with its subsi diaries, “Valtris” or the “Target” , USA ) (the 
“Transaction”).3 The Transaction  is accomplished by way of purchase of shares . In 
                                                 
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 ‘Commu nity’ 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 236 , 20.06.2022 , p. 109.  
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information omitted has been replaced by 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 the remainder of this decision, SK Capital is referred to as the “Notifying Party” and , 
together with Valtris, as the “Parties”.  
1. THE  PARTIE S  
(2) SK Capital  is a US-based private investment firm focused on the specialty 
materials, chemicals and pharmaceutical sectors. It was founded in 2007 and is 
based in New York, USA, with an additional office in Miami, Florida. It manages 
SK Capital  Investment VI, Ltd., which, in turn, manages SK Capital Fund VI, 
whose wholly owned indirect subsidiary – Valor Acquisition Buyer Inc. – is the 
entity carrying out the transaction in the present case (“Valor”). SK Capital is 
active globally, through its p ortfolio companies, with a specific focus on North 
America, the EEA, the Middle East and Australia.  
(3) Valtris  is a US -based company , headquartered in Independence, Ohio, active in the 
supply of specialty chemicals, primarily used as additives in the product ion and 
processing of plastics, and chemical precursors used in coatings, flavour and 
fragrance, personal care and pharmaceutical applications.  Valtris operates nine 
manufacturing facilities globally, four in the United States, four in Europe, and one 
in India.  
2. THE  CONCE NTRATION  
(4) On 7 March 2022 , the Parties entered into an agreement and plan of merger (the 
“Merger Agreement”) , pursuant to which Valor Acquisition Merger Sub Inc. 
(“Merger Sub”), a wholly owned direct subsidiary of Valor, will merge with and 
into Valtris, with Valtris surviving the merger as a wholly owned direct subsidiary 
of Valor.  
(5) SK Capital will therefore solely control Valtris within the meaning of Article 
3(1)(b) of the Merger Regulation.  
3. UNION  DIME NSION  
(6) The undertakings concerned have a  combined aggregate world -wide turnover of 
more than EUR 5 000 million  (SK Capital: EUR […] million, Valtris: EUR […]  
million)4. Each of them has a  Union -wide turnover in excess of EUR 250 million  
(SK Capital: EUR […] million, Valtris: EUR […] million) , but they do not achieve 
more than two -thirds of their aggregate U nion-wide turnover within one and the 
same Member State. The notified concentration  therefore has a U nion dimension.   
4. OVE RVIE W OF AFFE CTE D MARKE TS  
(7) The T ransaction gives rise to horizontal ove rlaps5 and vertical links globally and in 
the EEA in relation to chemicals . As a result of the Parties’ overlapping activities 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
5  The Transaction gives rise to five horizontal overlaps in the markets for (i) liquid organophosphites, 
(ii) non -hindered amine light stabilisers, (iii) phthalate pla sticisers, (iv) aliphatic plasticisers, and (v) 
trimellitate plasticisers. None of these horizontal overlaps give rise to affected markets.  

 
 
4 (9) The affected markets identified above  will be the focus of theremaining sections of 
the present decision.    
5. MARKE T DE FINITIONS  
5.1. Market for the production and supply of BALD  
(10) BALD is a colourless liquid, which has a n almond -like odour. It is an organic 
compound consisting of a benzene ring  with a formyl substituent and can be 
obtained by many processes. BALD can be formed by partial oxidation of benzoic 
alcohol and regularly oxidized BA LD and then converted to additional products by 
hydrocyanic acid or sodium bisulfide. It can also be prepa red by oxidation of 
toluene or benzyl chloride or by treating benzyl chloride with an alkali ( e.g., 
sodium hydroxide).  
(11) BALD is commonly employed as a food-flavouring  agent, as well as in the 
synthesis of other organic compounds, including pharmaceuticals, agrochemicals 
and plastic additives. BALD is also used as an intermediate for the processing of 
perfume and flavouring compounds and in the preparation of certain aniline dyes.  
(12) In terms of product market definition, the Commission has concluded in the past  
that BALD constitutes a separate relevant product market, as it is almost 
impossible to find a suitable substitute given its specific chemical structural 
characteristics and its specific organoleptic characteristics.7 
(13) The Notifying Party agrees with the p revious practice of the Commission and 
submits that the market should not be further segmented, e.g. , by application or 
based on  BALD’s production process (i.e. , produced via oxidisation or 
chlorination).8 
(14) The Commission’s file and the market investigation  results do not contain any 
indication that would suggest departing from the Commission’s previous practice 
and the views of the Notifying Party. For instance, one competitor responding to 
the Commission’s market investigation indicated that “[t] he differe nt specifications 
(or rather quality levels) of BALD that are available on the market do not differ too 
much from one another. This is why most customers are able to use similar 
qualities of BALD ”.9 
(15) For the purpose of the present case, the Commission therefore considers the market 
to consist of BALD without any further segmentation. However , the Commission 
considers that the exact scope of the product market definition for BALD can be 
left open, since no competition concerns would arise from the Transa ction 
regardless of the exact product scope of the market .10 
                                                 
7  See Case COMP/M.5785 - Sun Capital/ DSM Special Products , decision of 02.12.2010, paras 28 -33. 
8  Form CO, paras 134 -135. 
9  Response to questions 4.1 and 4.2 of questionnaire to competitors.  
10  Additionally, the Notifying Party confirmed that market s hares would not be materially different 
considering different plausible segmentations.  
 
 
5 (16) Regarding geographic market definition, in the past the Commission has left the 
geographic market definition for BALD open but considered the market to be at 
least EEA -wide.11 
(17) The Notifying Party considers  that the market is global as (i) all major 
manufacturers  ship BALD worldwide, (ii) tariffs for imports and transport costs are 
low, and  (ii) customers order BALD from suppliers irrespective of their geographic 
location.12  
(18) The Commission’s market investigation indicates that the relevant geographic 
scope for BALD is likely EEA -wide but with global elements.  Specifically, 
suppliers of BALD are generally active on a global basis and costs for import and 
transport are not particularly high.  For instan ce, while the majority of customers 
that responded to the market investigation sources BALD within Europe, they also 
indicate that they could easily source BALD outside of Europe.13 
(19) In any event, the Commission considers that, for the purposes of the presen t 
decision , the exact scope of the geographic market definition for BALD can be left 
open, since no competition concerns would arise from the Transaction regardless of 
the exact geographic scope of the market, i.e., EEA-wide or global.  
5.2. Market for the produ ction and supply of b enzyl chloride  
(20) Benzyl chloride is an organic chemical manufactured by  the chlorination of 
toluene . It is known for its strong, unpleasant odor and is a colorless liquid at room 
temperature. It is moderately flammable, and gives off explosive fumes when 
heated. Chemically, benzyl chloride is considered to be structurally the simplest 
supply -chain chlorinated derivative of toluene.  
(21) Benzyl chloride has a number of applications in industrial chemical syntheses. Its 
main uses are as a fee dstock in the production of benzyl alcohol (accounting for 
about 52% of total benzyl chloride consumption), benzyl cyanide (14%), benzyl 
quaternary ammonium compounds (17%), and benzyl phthalates (4%), with the 
remainder consumed for benzyl esters and othe r products. These products are in 
turn used in the production of a diverse range of products, such as plasticisers, 
sanitizing agents, oil extraction materials, pharmaceuticals, agrochemicals, 
biocides, dyes and pigments, heat exchanging fluids, flavours a nd fragrances, and 
specialty chemicals.14 
(22) In relation to the  product market  definition for benzyl chloride , the Commission 
has not previously considered a market for benzyl chloride but the Notifying Party 
submits that , in a previous decision,15 the Commissi on has defined separate product 
markets for certain products that can be produced using benzyl chloride, namely 
benzyl alcohol and BALD .16  
                                                 
11  See Case COMP/M.5785 - Sun Capital/ DSM Special Products , decision of 02.12.2010, paras 76 -79. 
12  Form CO, para. 136.  
13  Response to questions 6 and 7 of questionnaire to customers.  
14  Form CO, paras 152 and 154.  
15  See Case COMP/M.5785 - Sun Capital/ DSM Special Products , decision of 02.12.2010, paras 28 -38. 
16  Form CO, para. 156 and footnote 64.  
 
 
6 (23) The Notifying Party submits that no further plausible segmentation  can be  
considered for benzyl chloride, e.g., by ap plication . According to the Notifying 
Party, suppliers offer only one grade of benzyl chloride and there is very little 
technical differentiation between their offering. The Notifying Party further states 
that, from the demand -side, while benzyl chloride h as a number of applications in 
industrial chemical syntheses, it is used as feedstock in all cases.17 
(24) The Commission  has obtained no evidence  from the market investigation  
indicating that the market for benzyl chloride should be further segmented . For 
instance, one competitor responding to the Commission’s market investigation 
indicated that “[t] he different specifications (or rather quality levels) of benzyl 
chloride that are available on the market do not differ too much from one another. 
This is why most customers are able to use similar qualities of benzyl chloride ”.18 
(25) For the purpose of the present case, the Commission therefore considers the market 
to consist of benzyl chloride without any further segmentation. However , the 
Commission considers that  the exact scope of the product market definition for 
benzyl chloride  can be left open, since no competition concerns would arise from 
the Transaction regardless of the exact product scope of the market.19 
(26) In terms of geographic market, the Commission has not in  the past looked into a 
geographic market for benzyl chloride.  
(27) Notifying Party considers that the market is global as (i) suppliers of benzyl 
chloride can easily serve customers worldwide from a number of manufacturing 
sites, (ii) there are currently no ma terial barriers to the import of benzyl chloride 
into the EEA,  and (ii i) customers order benzyl chloride  from suppliers irrespective 
of their geographic location.20  
(28) The Commission’s market investigation indicates that the re levant geographic 
scope for benz yl chloride is likely  EEA-wide. In particular, the majority of 
customers sources benzyl chloride within Europe and –as a customer indicated – 
“[s]hipping costs and product availability are challenges to sourcing Benzyl 
Chloride from other regions outside EU  for production within EU ”.21 At the same 
time, a number of customers indicated that they would not see any obstacles to 
source this product from outside of the EEA and, similarly, one competitor 
confirmed that it could supply this product from outside the EEA into the EEA.   
(29) In any event, the Commission considers that, for the purposes of the present 
decision , the exact scope of the geographic market for benzyl chloride  can be left 
open, since no competition concerns would arise from the Transaction regardl ess of 
the exact geographic scope of the market, i.e., EEA-wide or global.  
                                                 
17  Form CO, para. 155.  
18  Response to questions 7.1 and 7.2 of questionnaire to competitors.  
19  Additionally, the Notifying Party confirmed that market shares would not be materially different 
considering different plausible segmentations.  
20  orm CO, para. 136.  
21  Response to quest ions 6 and 10 of questionnaire to customers.  
 
 
7 5.3. Market for the production and supply of c ationic dyes  
(30) Textile dyestuffs are water soluble or dispersible substances for staining or 
colouring textiles. Different types of dyestuffs can be distinguished depending, 
inter alia , on the types of substrates to which dyes are applied, the physical and 
chemical nature of the dye and the application method used. C ationic dyes are  one 
of these product types, used primarily in texti les for application to acrylics .  
(31) The Commission has in the past considered the overall market for textile dyestuffs, 
distinguish ing between the various application classes as separate product 
markets .22 Among these markets, there is the market for cationic dyes, w here SK 
Capital’s portfolio company (Archroma) is active.  
(32) The Commission’s file in the present case does not contain any indication that 
would suggest departing from the Commission’s previous practice  that identifies 
within the overall market for textile dyestuffs separate markets depending on the 
application classes and, among them, the market for cationic dyes .  
(33) For the purpose of the present case, the Commission therefore considers the market 
to consist of cationic dyes.  
(34) In terms of geographic market, the Commission has previously considered the 
market for  other types of textile dyestuffs as likely global in scope, although 
ultimately leaving the geographic market definition open.23  
(35) The Notifying Party submits  that the market for cationic dyes is global.24  
(36) In any event, the Commission considers that, for the purposes of the present 
decision , the exact scope of the geographic market definition for cationic dyes can 
be left open, since no competition concerns would arise from the Transaction 
regardless of t he exact geographic scope of the market, i.e., global or smaller 
(EEA-wide). 
5.4. Market for the production and supply of OBA  
(37) Textile  chemicals are used in yarn production and preparation, fabric formation, 
fabric finishing and other miscellaneous manufacturing operations . Different types 
of textile chemicals can be distinguished depending on the types of substrates to 
which chemicals a re applied, the timing of application and the effect of the textile 
chemical. OBA are one of these product types .  
(38) OBA are additives that enhance the white appearance of fabrics and paper. They 
are water -soluble organic compounds with a high affinity for cellulosic material. 
The main types of optical brighteners are stilbene -based OBA and Dinatrium -4,4-
bis-(2-sulfostyryl) -biphenyl (DSBP) -based OBA. Stilbene -based OBA are used for 
                                                 
22  See Case COMP/M.4179 - Huntsman/CIBA TE Business , decision of 30.06.2006, paras 25 -28 and 37. 
See in the same vein Case COMP /IV M.534 - Bayer/Hoechst , decision of 21.12.1994; Case 
COMP/M.1987 - BASF/Bayer /H oechst /Dystar , decision of 05.09.2000.  
23  See Case COMP/M.4179 - Huntsman/CIBA TE Business , decision of 30.06.2006, paras 41 and 44.  
24  Form CO, para. 141.  
 
 
8 detergent, textile and paper applications. DSBP -based OBA are mainly used for 
detergent and textile applications .  
(39) In relation to product market definition, the Commission has previously considered 
OBA  as a distinct separate product market ,25 with a further distinction between 
stilbene -based OBA and DSBP -based OBA.26  
(40) The Notifying Party submits that the scope of the relevant product market can be 
left open due to the lack of impact on competition regardl ess of the exact market 
definition .27 
(41) The Commission’s file does not contain any indication that would suggest 
departing from the Commission’s previous practice.  
(42) For the purpose of the present case, the Commission therefore considers the market 
to consist of OBA,  with a further distinction between stilbene -based OBA and 
DSBP -based OBA.28 However, the Commission believes that the product market 
definition can be left open, as no concerns arise regardless of the exact product 
scope of the market.  
(43) In terms of g eographic market, the Commission has previously considered OBA as 
a likely global market , although ultimately leaving the geographic market 
definition open.29  
(44) The Notifying Party submits  that the market for OBA  is global.30  
(45) The Commission’s file does not contain any indication that would suggest 
departing from the Commission’s previous practice.   
(46) In any event, the Commission considers that, for the purposes of the present 
decision , the exact scope of the geographic market fo r OBA  can be left open, since 
no competition concerns would arise from the Transaction regardless of the exact 
geographic scope of the market, i.e., global or smaller ( EEA-wide). 
5.5. Market for the production and supply of p hotoresist polymers  
(47) Photoresists are  used in photolithography in which electromagnetic radiation is 
applied to burn a desired pattern onto a flat surface . Photolithography uses 
ultraviolet or deep ultraviolet radiation from lasers to be used at specific spectral 
wavelengths (such as 193 nm, 248 nm, 365 nm). The photoresist to be used must 
be responsive to the laser to be used. Therefore, these products are categorised by 
the wavelength of the radiation used in the photolithography process. Photoresist 
polymers are used as an input in the manu facture of photoresists and are custom -
                                                 
25  See Case COMP/M.4179 - Huntsman/CIBA TE Business , decision of 30.06.2006, paras 30 -37. 
26  See Ca se COMP/M.5355 - BASF/CIBA , decision of 12.03.2009, paras 395 -397. 
27  Form CO, para. 140.  
28  The Notifying Party specifies that Archroma does not produce DSBP -based OBA and is only active 
in the segment for stilbene -based OBA, therefore its market share would not significantly change 
considering the overall market for OBA and the segment for stilb ene-based OBA as a separate 
market.  
29  See Case COMP/M.4179 - Huntsman/CIBA TE Business , decision of 30.06.2006, paras 41 and 44.  
30  Form CO, para. 141.  
 
 
9 designed for the specific photoresist product. Therefore, 248 photoresist polymers 
are designed for use in formulating 248 nm photoresists.  
(48) Regarding product market definition, a lthough ultimately leaving it open, th e 
Commission has considered narrower plausible market definitions for each type of 
photo resist polymer s (e.g., 248 photoresist polymers or 193 photoresist 
polymers).31  
(49) The Notifying Party submits that the scope of the relevant product market can be 
left open due to the lack of impact on competition regardless of the exact market 
definition .  
(50) The Commission’s file does not contain any indication that would suggest 
departi ng from the Commission’s previous practice.  
(51) Nevertheless , the product market definition can be left open, as no concerns arise 
regardless of the ex act product scope of the market , i.e. even in the narrower 
plausible markets for each type of photoresist po lymers .32 
(52) In terms of geographic market, the Commission has previously considered 248 
photoresist polymers as a likely global market, although ultimately leaving the 
geographic market definition open.33  
(53) The Notifying Party submits that the market for photor esist polymers  is global , 
given that (i) transport prices are negligible in relation to sales prices, (ii) there are 
no regional market specificities or any other barriers to entry, (iii) suppliers are 
active globally from a limited number of production fa cilities, and (iv) customers in 
the EEA are supplied from facilities located in other world regions .34  
(54) The Commission considers that, for the purposes of the present decision , the exact 
scope of the geographic market for photoresist polymers  can be left op en, since no 
competition concerns would arise from the Transaction regardless of the exact 
geographic scope of the market, i.e., global or smaller ( EEA-wide). 
5.6. Market for the production and supply of d yeing auxiliaries  
(55) As analysed under section 5.4 above, textile chemicals are used in yarn production 
and preparation, fabric formation, fabric finishing and other miscellaneous 
manufacturing operations. Different types of textile chemicals can be distinguished 
depending on the types of substrates to which chem icals are applied, the timing of 
application and the eff ect of the textile chemical. Dyeing auxiliaries  are one of 
these product types .  
                                                 
31  See Case M.7932 - Dow/DuPont , decision of 27.03.2017, paras 3788 -3797.  
32  The Notifying Party confi rmed that SK Capital’s market share would not materially differ 
considering the overall market for photoresist polymers as well as any potential sub -segmentation.   
33  See Case M.7932 - Dow/DuPont , decision of 27.03.2017, paras 3798 -3800.  
34  Form CO, para.  174. 
 
 
10 (56) Regarding product market definition, the Commission has previously considered 
the market for dyeing auxiliaries as a separate product market , although ultimately 
leaving the exact product market definition open .35  
(57) The Notifying Party submits that the scope of the relevant product market can be 
left open due to the lack of impact on competition regardless of the exact marke t 
definition .36  
(58) The Commission’s file does not contain any indication that would suggest 
departing from the Commission’s previous practice.  
(59) For the purpose of the present case, the Commission therefore considers the market 
to consist of dyeing auxiliaries .  
(60) In terms of geographic market, the Commission has found the geographic scope for 
the markets relating to other types of textile chemicals as at least EEA -wide and 
possibly global, although ultimately leaving the geographic market definition 
open.37  
(61) In any event, the Commission considers that, for the purposes of the present 
decision, the exact scope of the geographic market definition for dyeing auxiliaries  
can be left open, since no competition concerns would arise from the Transaction 
regardless of  the geographic scope of the market, i.e., global or smaller ( EEA-
wide). 
5.7. Market for the manufacturing and supply of API 
(62) An API is the substance in a finished dose pharmaceutical (“FDP”) that is 
pharmaceutically active and is suspended in excipients (that is, inert substances 
taking the form, for instance, of a tablet or a solution), for the purposes of 
administration.  
(63) In terms of product market  definition , the Commission has previously considered 
that the manufacturing of APIs forms a distinct relevant pro duct market , which is 
upstream to the market for FDP . Additionally, the Commission considered that  
each individual API for each individual molecule may potentially constitute a 
relevant product market, although certain APIs may be substi tutable with each 
other for all  or for a range of applications . The Commission ultimately left the 
exact product market definition open .38  
                                                 
35  See Case COMP/M.4179 - Huntsman/CIBA TE Business , decision of 30.06.2006, paras 30 -37. 
36  Form CO, para. 159.  
37  See Case COMP/M.4179 - Huntsman/CIBA TE Business , decision of 30.06.2006, paras 40 and 44.  
38  See Case M.9517 – Mylan/Upjohn , decision of 22.04.2020, paras 559 -562; Case M.8362 – Lonza 
Group/Capsugel , decision of 21.04.2017, paras 23 -25; Case COMP/M.7645 – Mylan/Perrigo , 
decision of 29.07.2015, paras 125 -127; Case COMP/M.6278 – Takeda/Nycomed , decision of 
29.07.2011, paras 17 -18; Case COMP/M.5865 – Teva/Ratiopharm , decision of 03.08.2010, paras 
393-395; Case COMP/M.5555 – Novartis/Ebewe , decision of 22.09.2009, para. 16; Case 
COMP/M.5253 – Sanofi -Aventis/Zentiva , decision of 04.02.2009, paras 179 -181. Case 
COMP/M.5295 – Teva/Bar r, decision of 19.12.2008, para. 189.  
 
 
11 (64) The Notifying Party submits that the scope of the relevant product market can be 
left open due to the lack of impact on competition rega rdless of the  exact market 
definition .39  
(65) The Commission’s file does not contain any indication that would suggest 
departing from the Commission’s previous practice.  
(66) In any event, in the present case, the product market definition can be left open as 
no co ncerns arise even on the narrowest possible market definition, i.e., 
considering each individual API for each individual molecule as the relevant 
product market.  
(67) In terms of geographic market, the Commission has previously considered that API 
markets are wider than the markets for FDPs, at least EEA -wide and possibly 
worldwide, ultimately leaving the geographic market definition open.40  
(68) The Notifying Party advocates for a global definition of the market.41  
(69) In view of the fact that the Transaction does not raise serious doubts as to its 
compatibility with the internal market in relation to the API markets under any 
plausible geographic market definition, the exact scope of the geographic market 
(i.e., whether it is global or smaller ( at least EEA -wide) can b e left open.  
5.8. Market for the s upply of CDMO services to pharmaceutical companies at the 
API level  
(70) Regarding product market definition , the Commission has previously considered 
the existence of a market for the supply of CDMO services for API distinct from 
the market for the supply of contract manufacturing for FDP.42 Within the market 
for the supply of CDMO services at the API level, the Commission has previously 
considered a separate product market for biopharmaceutical CDMO services (as 
opposed to CDMO serv ices in relation to chemically -synthesised drugs). The 
Commission also envisaged, but ultimately left open, the question of whether the 
product market for biopharmaceutical CDMO services should be further segmented 
(i) based on the host system used in the manufacturing process ( i.e., mammalian 
cell cultures or microbial fermentation processes) and (ii) between process 
development and large -scale manufacturing of biopharmaceuticals.43 
                                                 
39  Form CO, para. 182.  
40  See Case M.9517 – Mylan/Upjohn , decision of 22.04.2020, paras 563 -566; Case M.8362 – Lonza 
Group/Capsugel , decision of 21.04.2017, paras 26 -28; Case COMP/M.7645 – Mylan/Perrigo , 
decision of 29.07.2015, para. 126; Case COMP/M.6278 – Takeda/Nycomed , decision of 29.07.2011, 
para. 19; Case COMP/M.5865 – Teva/Ratiopharm , decision of 03.08.2010, para. 396; Case 
COMP/M.5555 – Novartis/Ebewe , decision of 22.09.2009, para. 20; Case COMP/ M.5253 – Sanofi -
Aventis/Zentiva , decision of 04.02.2009, para. 186. Case COMP/M.5295 – Teva/Barr , decision of 
19.12.2008, para. 190.  
41  Form CO, para. 183.  
42  See Case M.9315 – Chr. Hansen/Lonza/JV , decision of 16.07.2019, para. 17; Case COMP/M. 8362 – 
Lonza Group/Capsugel , decision of 21.04.2017, paras 15 -19; Case COMP/M.8541 – Thermo Fisher 
Scientific/Patheon , decision of 23.08.2017, para. 46.  
43  See Case M.9315 – Chr. Hansen/Lonza/JV , decision of 16.07.2019, paras 18 -19. Case 
COMP/M.5479 – Lonza/Teva/JV , decision of 14.05.2009, paras 28 -36. 
 
 
12 (71) The Notifying Party submits that the scope of the relevant product market c an be 
left open due to the lack of impact on competition regardless of the exact product 
market definition .44  
(72) The Commission’s file does not contain any indication that would suggest 
departing from the Commission’s previous practice.  
(73) In any event, in the present case, the product market definition can be left open as 
no concerns arise even on the narrowest possible market definition , i.e., (i) 
considering separate product markets for biopharmaceutical CDMO services, on 
the one hand and CDMO services for ch emically -synthesised drugs, on the other 
hand; or (ii) considering separate segments under the biopharmaceutical CDMO 
services market, as described above . 
(74) In terms of geographic market, the Commission has previously considered the 
respective markets for CD MO services at the API level to be at least EEA -wide in 
scope and possibly worldwide, although ultimately leaving the geographic market 
definition open.45  
(75) The Notifying Party submits that the question of whether the market for CDMO 
services to pharmaceutic al companies and its potential segments is at least EEA -
wide or global in scope can be left open.46  
(76) In view of the fact that the Transaction does not raise serious doubts as to its 
compatibility with the internal market in relation to CDMO services under a ny 
plausible geographic market definition, the exact scope of the geographic market 
(i.e., whether it is  global or smaller ( at least EEA -wide) can be left open.  
6. COMPE TITIVE ASSE SSME N T 
6.1. BALD (upstream) - Cationic dyes / OBA / Photoresist polymers (downstream ) 
(77) Valtris is active upstream in the supply of BALD in the EEA and globally , whereas 
two of SK Capital’s portfolio companies are active in the downstream markets, 
namely Archroma is active in cationic dyes and OBA in the EEA and globally , and 
Seqens is acti ve in photoresist polymers globally  but with no sales in the EEA.  
                                                 
44  Form CO, para. 185.  
45  See Case M.9315 – Chr. Hansen/Lonza/JV , decision of 16.07.2019, paras 24 -27; Case COMP/M. 
8362 – Lonza Group/Capsugel , decision of 21.04.2017, paras 20 -22; Case COMP/M.8541 – Thermo 
Fisher Sci entific/Patheon , decision of 23.08.2017, paras 49 -50. 
46  Form CO, para. 186.  
 
 
13 (78) Valtris’ market share of BALD in 2021 in both volume and value is presented in 
Table 2 below.47 
Table 2: 2021 market shares for BALD in the EEA and globally48 
 
BALD 
Supplier  EEA Worldwide  
Volume 
(MT)  Volume 
(% ) Sales 
(E UR 
million)  Sales (% )  Volum
e (MT)  Volume 
(% ) Sales 
(E UR 
million)  Sales 
(% ) 
Valtris  […] [30-40]%  […] [30-40]%  […] [5-10]%  […] [5-10]%  
Lanxess  […] [50-60]%  […] [60-70]%  […] [30-40]%  […] [30-40]%  
KLJ Organic  […] [0-5]% […] [0-5]% […] [10-20]%  […] [10-20]%  
Hubei 
Greenhome  […] [0-5]% […] [0-5]% […] [5-10]%  […] [5-10]%  
Kelin Bolun  […] [0-5]% […] [0-5]% […] [30-40]%  […] [30-40]%  
Others  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Total  […] 100.0%  […] 100.0%  […] 100.0%  […] 100.0%  
Source: Form CO, Tables 13 and Annex 18.  
(79) Archroma uses BALD in the downstream production of cationic dyes (under the 
brand Cartasol) and OBA (under the brands Ultraphor and Telalux). Arch roma’s 
market share is  [0-5]% on both a n EEA -wide and global basis  in cationic dyes, and  
[0-5]% on both an EEA -wide and global basis under any plausible segmentation of 
OBA. Archroma  purchases small quantities of BALD from suppliers other than 
Valtris (approx. EUR […] in 2019, EUR […] in 2020, and EUR […] in 2021), 
representing  [0-5]% of the total EEA demand in the upstream market for the supply 
of BALD.49  
(80) Seqens uses BALD in the downstream production of photoresist polymers. S eqens’ 
market share is  [0-5]% on both an EEA -wide and global basis under any plausible 
segmentation of photoresist polymers. Seqens purchased a small quantity of BALD 
from a supplier other than Valtris in 2021 (approx. EUR […]), representing  [0-5]% 
of total demand in the upstream mar ket.50  
(81) Taking into account that Valtris’ market share at the upstream level only surpasses 
30%, if the market for BALD were to be defined EEA -wide, and market shares in 
the downstream markets for cationic dyes, OBA and photoresist polymers remain 
below 30%  in all possible segmentations at EEA and global level , the Commission 
notes that the proposed Transaction only gives rise to vertically affected markets in 
so far as the geographic market for BALD is considered to be EEA -wide.  
6.1.1.  The Notifying Party’s view  
(82) The Notifying Party submits that the vertical link between Valtris’ upstream supply 
of BALD and Archroma’s downstream supply of cationic dyes and OBA does not 
give rise to any competition concerns , notably on the grounds that (i) Valtris has a 
                                                 
47  The Notifying Party confirms that to the best of Valtris’ knowledge, its market share would not be 
materially higher in further segmentations of the BALD market on the basis of  (i) chlorine level, or 
(ii) production process (Form CO, footnote 53).  
48  Form CO, Annex 18.  
49  Form CO, para. 147.  
50  Form CO, para. 177.  
 
 
14 low global ma rket share, (ii) the market is global, (iii) there is a large number of 
alternative suppliers, and (iv) Archroma only purchases minor amounts of BALD.51  
(83) The Notifying Party also submits that the vertical link between Valtris’ upst ream 
supply of BALD and Se qens’  downstream supply of photoresist polymers does not 
give rise to any competition concerns , for the following reasons:  (i) Valtris has a 
low global market share, (ii) the market is global, (iii) there is a large number of 
alternative suppliers, and (iv ) Seqens  only purchases negligible  amounts of 
BALD.52 
6.1.2.  The Commission’s assessment  
(84) Given the negligible market share of SK Capital’s portfolio companies in the 
downstream markets, the following section will not focus on risks of customer 
foreclosure but rath er on assessing whether the Transaction may give rise to risks 
of input foreclosure.  
(85) Input foreclosure arises where, post -merger, the new entity would be likely to 
restrict access to the products or services that it would have otherwise supplied 
absent th e merger, thereby raising its downstream rivals’ costs by making it harder 
for them to obtain supplies of the input under similar prices and conditions as 
absent the merger. This may lead the merged entity to profitably increase the price 
charged to consum ers, resulting in a significant impediment to effective 
competition.53 In assessing the likelihood of an anticompetitive input foreclosure 
scenario, the Commission examines, first, whether the merged entity would have, 
post-merger, the ability to substantia lly foreclose access to inputs, second, whether 
it would have the incentive to do so, and third, whether a foreclosure strategy 
would have a significant detrimental effect on competition downstream.54  
(86) Firstly , for input foreclosure to be a concern, the merged entity resulting from the 
Transaction must have a significant degree of market power in the upstream 
market. In this respect, the Commission notes that Valtris’ market share in the 
upstream market for BALD in the EEA was just above 30% in 202155 and that , 
where a merged entity would have a market share just above the 30% threshold on 
one market but substantially below on other related markets, competition concerns 
will be less likely.56 The Commission also not es that Valtris’ market share in 
BALD was higher in 2019 and 2020 (between [40-50]% and [40-50]%, depending 
on value or volume) and […].57 It is therefore apparent that in a plausible EEA -
wide market for BALD, there remains sufficient competition and a suff icient 
number of alternative competitors that would be  able to restrain the behaviour of 
the merged entity.   
                                                 
51  Form CO, paras 142 -151. 
52  Form CO, paras 175 -180. 
53  Non-Horizontal Merger Guidelines, para. 31.  
54  Non-Horizont al Merger Guidelines, para. 32. 
55  The Notifying Party submits that, to the best of Valtris’ knowledge, Valtris’ market share would not 
be materially higher when considering separate BALD markets by (i) chlorine level or (ii) production 
process.  
56  Non-Horizontal Merger Guidelines, para. 25 and footnote 3.  
57  Form CO, footnote 62.  
 
 
15 (87) The Commission’s market investigation confirmed that the market for the supply of 
BALD in the EEA would remain sufficiently competitive post -Trans action.58 
Therefore, the market would remain sufficiently competitive to exclude 
competition concerns on the ground of lack of ability to carry out an input 
foreclosure strategy , as should the merged entity engage in such strategy, 
customers would switch to  alternative suppliers active in the market . 
(88) Secondly , given that the merged entity would have no ability to foreclose, the 
Commission considers it unnecessary to assess whether the merged entity would 
have the incentive to foreclose.  
(89) Nevertheless, the Co mmission notes that the incentive to foreclose would depend 
on the degree to which the trade -off between the profit lost in the upstream market 
due to a reduction of input sales to rivals and the profit gain from expanding sales 
downstream would be profita ble.59 In this respect, the Commission observes that (i) 
Archroma’s market share is  [0-5]% on both an EEA -wide and global basis  in 
cationic dyes, and  [0-5]% on both an EEA -wide and global basis under any 
plausible segmentation of OBA, and (ii) S eqens’ market share is  [0-5]% on both an 
EEA-wide and global basis under any plausible segmentation of photoresist 
polymers.  In addition, Archroma’s purch ases of BALD represent  [0-5]% of the 
total purchases of BALD in the EEA , whereas Seqens’ purchases of BALD 
represent  [0-5]% of the total purchases of BALD in the EEA . Finally, BALD is 
used in a variety of industries, such as agrochemicals, pharmaceuticals, aroma 
chemicals, cosmetics, personal care, and others. Therefore, given that Archroma’s 
and Seqens’ BALD pur chases only represent a small portion of the market demand 
for BALD, the Commission considers that the trade -off between the profit lost in 
the upstream market due to a reduction of input sales to rivals and the profit gain ed 
from expanding sales downstrea m would not be profitable.  
(90) The Commission’s market investigation also confirmed that the merged entity 
would not have an incentive to carry out an input foreclosure strategy , and that in 
any event, even if an input foreclosure strategy was put in place, t here would be 
sufficient competition to switch to .60 
(91) Thirdly , in terms of impact on competition, the majority of the respondents to the 
Commission’s market investigation confirmed that they expect no impact on the 
market.61 In any event, the Commission’s mar ket investigation confirmed that the 
market for the supply of BALD in the EEA would remain sufficiently competitive 
post-Transaction.62 
(92) On the basis of the above considerations, the Commission concludes that the 
Transaction does not raise serious doubts as to its compatibility with the internal 
                                                 
58  Responses to question 13 of questionnaire to customers and question 10 of questionnaire to 
competitors.  
59  Non-Horizontal Merger Guidelines, paras 40 -41. 
60  Responses to  question 17 of questionnaire to customers and question 12 of questionnaire to 
competitors.  
61  Responses to question 19 of questionnaire to customers and question 17 of questionnaire to 
competitors.  
62  Responses to question 13 of questionnaire to customers  and question 10 of questionnaire to 
competitors.  

 
 
17 companies at the  API level.66 Seqens purchased a small quantity of benzyl chloride 
in 2021 (approx. EUR […]), representing  [0-5]%  of total EEA demand in the 
upstream market  for the supply of benzyl chloride .67  
(97) Valtris’ market share at the upstream level only surpasses 30%  if the market for 
benzyl chloride  were to be defined EEA -wide, and market shares in the 
downstream markets for dyeing auxiliaries, API, and API CDMO remain below 
30% in all possible segmentations at EEA and global level; thus, the Commission 
notes that th e proposed Transaction only gives rise to vertically affected markets in 
so far as the geographic market for benzyl chloride is considered to be EEA -wide.  
6.2.1.  The Notifying Party’s view  
(98) The Notifying Party submits that the vertical link between Valtris’ upstr eam supply 
of benzyl chloride  and Archroma’s downstream supply of dyeing auxiliaries  does 
not give rise to any competition concerns , notably on the grounds that (i) Valtris 
has a low global market share, (ii) the market is global, (iii) there is a large number 
of alternative suppliers, and (iv) Archroma only purchases minor amounts of 
benzyl chloride . 68 
(99) The Notifying Party also submits  that the vertical link between Valtris’ upstream 
supply of benzyl chloride and Seqens’  downstream manufacturing of API on a 
proprietary basis, and downstream supply of CDMO services to pharmaceutical 
companies at the API level  does not give rise to any co mpetition concerns , for the 
following reasons: (i) Valtris has a low global market share, (ii) the market is 
global, (iii) there is a large numb er of alternative suppliers,  and (iv) Seqens only 
purchases negligible amounts of benzyl chloride .69 
6.2.2.  The Commissi on’s assessment  
(100)  In line with the above assessment for BALD, given the limited  market share of SK 
Capital’s portfolio companies in the downstream markets, the following section 
will not focus on risks of customer foreclosure but rather on assessing whether the 
Transaction may give rise to risks of input foreclosure.  
(101)  Input foreclosure may raise competition problems only if it concerns an important 
input for the downstream product. This is the case, for example, when the input 
concerned represents a significan t cost factor relative to the price of the 
downstream product.70 In this respect, the Commission firstly  notes that t he input 
cost of benzyl chloride represents approx. [5-10]% of the final sale price of 
Archroma’s dyeing auxiliaries products in the downstr eam market, representing 
only a minor factor relative to their pricing. Similarly, the input cost  of benzyl 
chloride is  [0-5]% of the final sale price of Seqens’ pharmaceutical products in the 
downstream markets. Benzyl chloride has a number of application s in industrial 
                                                 
66  The Notifying Party confirmed that Seqens’ market  share for API CDMO is  [0-5]% in the EEA and 
[5-10]% globally, under any plausible market definition. For  completeness, the Notifying Party notes 
that Seqens only provides CDMO services for chemically -synthesized drugs.  
67  Form CO, para. 190.  
68  Form CO, paras 161 -169. 
69  Form CO, paras 187 -191. 
70  Non-Horizontal Merger Guidelines, para. 34. 
 
 
18 chemical syntheses. From a supply side perspective, suppliers offer only one grade 
of benzyl chloride, and there is very limited technical differentiation among 
competitors’ products.71 
(102)  Secondly , while the Commission notes Valtris’ high market share in an EEA -wide 
market for benzyl chloride ( [60-70]% in both value and volume) ,  it also observes  
that Valtris’ competitor, Lanxess, appears to be a strong close competitor being 
able to restrain Valtris’ behaviour in the upstream market for be nzyl chloride. In 
particular, the majority of customers responding to the Commission’s market 
investigation has ranked both Valtris and Lanxess as the most credible suppliers of 
benzyl chloride for EEA customers. Hubei Greenhome and Luxi have also been 
identified as following closely.72  
(103)  Thirdly , even in an EEA -wide market of benzyl chloride , there appear to be  out-of-
market constraints from global suppliers. For example, the Notifying Party submits 
that Archroma itself multi -sources its benzyl chloride needs from different global 
suppliers to manufacture its downstream products in its production plants in Spain  
and in India . Archroma purchases benzyl chloride from suppliers other than Valtris 
and only one of them is based in Spain, within the EEA.73  
(104)  Fourthly , even if the merged entity had the ability to foreclose downstream 
competitors, the Commission notes that  there would not appear to be an incentive 
to do so . First, Arch roma’s market share is  [0-5]% in the downstream market for 
dyeing auxiliaries in the EEA and S eqens’ market share is  [0-5]% in API and  [0-
5]% in the downstream supply of CDMO services to pharm aceutical companies at 
the API level in the EEA. Second, benzyl chloride has a number of applications in 
a variety of industries including oilfield chemicals, disinfectants, consumer 
products and others. According to the Notifying Party, in 2021 , only [0-5]% of 
Valtris ’ customers of benzyl chloride in the EEA were active in the pharmaceutical 
industry, whereas [0-5]% of global customers were active in the textile industry 
and thus might use benzyl chloride for dyeing auxiliaries.74 Therefore, following an 
input foreclosure strategy, any profit lost in the upstream market of benzyl chloride 
in the EEA would hardly be compensated by any profit gains in the downstream 
markets. Lastly, a significant part of the benzyl chloride productio n is used 
captively as an intermediate product,75 with the rest being sold on the merchant 
market. In light of this, there are likely no incentives to foreclose downstream 
competitors, many of which could simply then increase their own in -house supply.  
(105)  Fifthly, in terms of impact on competition, the majority of the respondents to the 
Commission’s market investigation confirmed that they expect no impact on the 
market.76 In any event, the Commission’s market investigation also confirmed that 
                                                 
71  Form CO, paras 154 -155. 
72  Response to question 11 of questionnaire to customers.  
73  Form CO, para. 167.  
74  Form CO, paras 165 and 188.  
75  Form CO, para. 153.  
76  Responses to question 20 of questionnaire to customers and question 18 of questionnaire to 
competitors . 
 
 
19 the market for the  supply of benzyl chloride in the EEA would remain sufficiently 
competitive post -Transaction.77 
(106)  On the basis of the above considerations, the Commission concludes that the 
Transaction does not raise serious doubts as to its compatibility with the internal 
market with regard to the vertical relationship between benzyl chloride  (upstream) 
and dyeing auxiliaries, API or the supply of CDMO services to pharmaceutical 
companies at the API level  (downstream) , under any market definition that the 
Commission consider s plausible.  
7. CONCLUSION  
(107)  For the above reasons, the Commission has decided not to oppose the notified 
concentrat ion and to declare it compatible with the internal market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement.   
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice -President  
 
                                                 
77  Responses to question 15 of questionnaire to customers and question 14 of questionnaire to 
competitors.