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,  21.09.2020  
C(2020 ) 6545 final  
PUBLIC VERSION  
 
To the notifying party  
Subject : Case M. 9883 – INEOS / BP CHEMICALS BUSINESS  
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 17 August 2020, the Commission received notification of a proposed 
concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004  by 
which the INEOS group (“INEOS”, UK) acquires within the meaning of Article 
3(1)(b) of the Merger Regulation control of the chemicals business of BP plc (“BP’s 
chemicals business”, UK), (the “Transaction”)3. INEOS is referred to as the 
“Notifying Party” and, together  with BP’s chemicals business, the “Parties”.  
1. THE PARTIES  
(2)  INEOS is a global manufacturer of petrochemicals, specialty chemicals and oil 
products. Through its business division INEOS Oxide, it is active in the production 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation ”). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union ( “TFEU ”) has introduced certain changes, such as the replacement of  
“Community ” by “Union ” and “common market ” by “internal market ”. The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).  
3  Publication in the Official Journal of the European Union No C 280, 25/08/2020 , p. 18. 
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information omitted has been replaced by 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 and sale of acetate esters includin g ethyl acetate, butyl acetate and isopropyl acetate. 
Through other business divisions, INEOS is active in the production and sale of 
products derived from oil and gas, including benzene , products downstream of 
benzene and acrylonitrile.  
(3) BP’s chemicals bus iness comprises (i) BP’s acetyls business, namely its activities in 
acetic acid; certain products that require acetic acid as an input, namely acetic 
anhydride, ethyl acetate  (“EtAc”) , butyl acetate  (“BuAc”) , and vinyl acetate 
monomer  (“VAM”) ; and methanol ; (ii) BP’s aromatics business, namely its 
activities in paraxylene (“PX) and purified terephthalic acid  (“PTA”) , as well as 
related production of benzene, meta xylene and gasoline blended components; and 
(iii) related technology licensing and catalysts bu sinesses, and BP’s interests in green 
technologies Infinia, Virent and Tricoya . 
2. THE OPERATION  AND THE CONCENTRATI ON 
(4) On 29 June 2020, INEOS and BP plc entered into a sale and purchase agreement 
(“SPA”), which was amended and restated on 3 July 2020. The ame nded and 
restated SPA provides that INEOS will acquire the shares of the relevant legal 
entities comprising BP’s chemicals business. Following completion of the 
Transaction, INEOS will thus acquire sole control of BP’s chemicals business. The 
Transaction i s therefore a concentration within the meaning of Article 3(1)(b) of the 
EU Merger Regulation.  
3. EU DIMENSION  
(5) The combined aggregate worldwide turnover of the Parties exceeded EUR 5 000 
million in 2019 (INEOS: EUR […] million; BP’s chemicals business: EUR […] 
million) and the aggregate Union -wide turnover of each of the Parties is more than 
EUR 250 million (INEOS: EUR […] million; BP’s chemicals business: EUR […] 
million). Not each of the Parties achieved more than two -thirds of their Union -wide 
turnover within one and the same Member State. The Transaction therefore has a 
Union dimension pursuant to Article 1(2) of the Merger Regulation .  
4. MARKET DEFINITIONS  
4.1. Intro duction  – Activities of the Parties  
(6) BP’s acetyls business comprises its activities in acetic acid; certain products that 
require acetic acid as an input, namely acetic anhydride,  EtAc, BuAc and VAM ; and 
methanol, which is an input for the production of ace tic acid. BP’s aromatics 
business comprises its activities in PX, PTA, as well as related production of 
benzene, metaxylene and gasoline blended components.   
(7) INEOS’ business in petrochemicals, speciality chemicals and oil products comprise s 
a number of bus iness divisions, including  for (i) acetate esters, including EtAc and 
BuAc; (ii) acrylonitrile; (iii) products derived from oil and gas , namely ethylene, 
propylene, butadiene, polyolefins and benzene ; (iv) phenol; (v) styrene; (vi) 
 
3 isophthalic acid, trimel litic anhydride and maleic anhydride; and (vii) chlor alkali, 
vinyls, and organic chlorine derivatives .4 
4.2. Acetic Acid  
(8) Acetic acid is an intermediate chemical product used in the production of various 
other chemicals, and is used globally in many diverse app lications. It is a globally 
traded, bulk commodity product , which is sold in varying concentrations, for which 
there are over 60 producers worldwide. Pure acetic acid is a colourless, corrosive, 
flammable liquid that has an ability to react with alcohols and amines to produce 
esters and amides. It can also react w ith alkenes to produce acetate esters (such as 
EtAc, BuAc and isopropyl acetate “ IPAC ”). 
4.2.1.  Product market definition  
4.2.1.1.  Commission precedents  
(9) The Commission has previously considered that acetic acid constitu tes a separate 
product market.5 
4.2.1.2.  The Notifying Party’s  view  
(10) The Notifying Party agrees with this view . 6 
4.2.1.3.  Result s of the market investigation and conclusion  
(11) Replies from both customers7 and competitors8 clearly indicate that acetic acid is not 
substitutable by any other product and should form a distinct prod uct market . 
Furthermore, a majority of both customers9 and competitors10 indicates  that no 
further segmentation is needed.  
(12) In light of the above, the Commission considers that the relevant product market for 
acetic acid is a separate market without any furt her sub -segmentations.  
4.2.2.  Geographic market definition  
4.2.2.1.  Commission precedents  
(13) The Commission previously found (as a result of a Phase II investigation ) that the 
geographic market for acetic acid was worldwide in scope.11 
                                                 
4  Products of special relevance to the assessment of the case are presented in sect ions 4.2, 4.3, 4.4 as well as 
5.1 of this Decision.  
5  See Case M.3625 Blackstone / Acetex.  
6  See Form CO paragraph 6.62.  
7  See replies to question 1 1, Q1 – Questionnaire to acetic acid customers.  
8  See replies to question 6, Q2 – Questionnaire to acetic acid competitors . 
9  See replies to question 1 2, Q1 – Questionnaire to acetic acid customers.  
10  See replies to  question 7 Q2 – Questionnaire to acetic acid competitors.  
11  See Case M.3625  – Blackstone / Acetex . 
 
4 4.2.2.2.  The Notifying Party’s view  
(14) The Notifying Party agrees with this precedent , and further submits that the market 
conditions have since evolved in the direction of an even greater globalisation of the 
acetic acid market.12 
(15) The Notifying Party’s main arguments are that (i) imports of ace tic acid now satisfy 
[60-70]% of EEA demand (imports satisfied only 20% of the Western European 
demand at the time of a previous Commission Decision13); (ii) there are no barriers 
to trade acetic acid globally, such as transport costs, import duties or nati onal 
regulations, in line with the Commission’s past findings; (iii) there is significant 
over-capacity at a global level, and exports from North America and Northeast Asia 
into the EEA are expected to increase still further over the next five years; and ( iv) 
previous unplanned outages of acetic acid in the EEA have led to an increase in 
imports, as occurred in particular in 2010 – 2011 due to a force majeure  event at 
BP’s chemicals business’ acetic acid facility in Hull.  
4.2.2.3.  Result s of the market investigation  and conclusion  
(16) Both customers14 and competitors15 consider the market for acetic acid to be 
worldwide. In their replies customers16 and competitors17 for acetic acid confirm the  
arguments of the Notifying Party, outlined in paragraph (15). 
(17) In light of the above, the Commission considers that the relevant geographic market 
for acetic acid is world -wide.  
4.3. Butyl Acetate (“ BuAc ”) 
(18) BuAc is a solvent used in the  coatings, leather, paper and chemical processing 
industries, as well as an extraction solvent in the manufacture of certain antibiotics 
and in the recovery of phenol from waste liquors.  
                                                 
12  See Form CO paragraph s 6.4 – 6.82.  
13  See Case M.3625 Blackstone / Acetex . 
14  See replies to question 22 , Q1 – Questionnaire to acetic acid customers.  
15  See replies to question 8, Q2 – Questionnaire to acetic acid c ompetito rs. 
16  See replies to question 22 .1, Q1 – Questionnaire to acetic acid customers  (“Acetic Acid can be shipped 
and purchased globally ”, “About 60 % of European demand is imported from the USA.”, “Deliveries 
have global character, production units are located in Far East, USA, Middle East and Europe (Hull – 
BP Installation ). Some non European producers have constantly product n their tanks in ARA for 
distribution of Acetic Acid in Europe .”, “acetic acid can be traded globally ”, “Acetic acid is produced at 
scale and transport costs are reasonable in bulk, so a global market is appropriate.  Imports from US and 
China into Europe can be competitive ”. 
17  See replies to question 8 .1, Q 2 – Questionnaire to acetic acid c ompetito rs (“AA market is worldwide with 
production facilities existing in North America, Europe, China (China is the main  place where global 
production capacities exist) ”, “Acetic acid is transported all over the world with limited logistics costs 
and correlated worldwide pricing. There is  no geographic barrier to shipping acid all over the world and 
many producers a ll over the world make acid that is  used in different regions. ”, “Acetic acid is 
transported all over the world ”, “Acetic acid is a commodity that is traded globally .”. 
 
5 4.3.1.  Product market definition  
4.3.1.1.  Commission precedents  
(19) In the past,18 the Com mission found that the market for BuAc should be subdivided 
into its isomers (same chemical formula but different chemical structures) which are 
isobutyl acetate (“iso -BuAc”) and n -butyl acetate (“n -BuAc”). Specifically for n -
BuAc, t he Commission also exam ined the possibi lity to sub -segment the market  by 
purity grade, between normal grade n -BuAc with a purity of 99.0% and high purity 
grade n -BuAc with a purity of at least 99.5%, but ultimately left this question open.19 
4.3.1.2.  The Notifying Party’s view  
(20) The Notifying Party submits20 that iso -BuAc and n -BuAc  form part of the same 
market, because on the supply -side, switching production between these two 
products is very easy and can be done in a matter of hours for producers equipped 
with the proper manufacturing equipment. For a producer not yet able to 
manu facture both products, additional equipment for the production of both isomers 
would only require a limited investment, around EUR [500 000 - 1.5 million] . From 
the demand -side, the Notifying Party claims that n -BuAc and iso -BuAc are, to some 
extent, inter changeable, as they are mainly used by the same industries and for the 
same purposes, but still acknowledges that there are a number of specific iso -BuAc 
applications that cannot use n -BuAc.  
(21) As regards a potential segmentation of n -BuAc by purity grade, th e Notifying Party 
explains that it was considered in case M.7858 – INEOS / Celanese assets because at 
that time, [differentiating between purity grades was more common than it is today] . 
The Notifying Party therefore submits that the segmentation of n -BuAc  by purity 
grade is no longer relevant.  
(22) Finally,  the Notifying Party underlines that  in the context of the assessment of a 
vertical relationship with acetic acid (upstream), the precise scope of the relevant 
downstream product market can be left open becau se all potential segmentations of 
the market for BuAc require acetic acid for their manufacture in identical amounts, 
proportions and quality.  
4.3.1.3.  Result s of the market investigation and conclusion  
(23) Producers of BuAc overwhelmingly support the view that iso -BuAc and n -BuAc 
form two distinct product markets. 21  
(24) The market investigation was inconclusive as to the substitutability between normal 
grade n -BuAc with a purity of 99.0% and high purity grade n -BuAc with a purity of 
at least 99.5%22. While confirming that  production of different purity grades within 
n-BuAc does not require different volumes or qualities of acetic acid, 23 and 
therefore that acetic acid does not represent a different proportion of the overall 
                                                 
18  See case M.7858  – INEOS / Celanese assets  
19  See case M.7858  – INEOS / Celanese asse ts 
20  See Form CO paragraphs 6.30 – 6.34.  
21  See replies to question 13, Q1 – Questionnaire to acetic acid customers . 
22  See replies to question 1 5, Q1 – Questionnaire to acetic acid customers . 
23  See replies to question 6, Q1 – Questionnaire to acetic acid customers . 
 
6 manufacturing costs for different purity grades w ithin n -BuAc,24 the market 
investigation clearly showed  25 that BuAc producers consider that switching between 
producing the two  purity  grades costs considerable time and effort and constitutes a 
major strategic decision.  
(25) Replies to the market investigation confirm the argument of the Notifying Party that 
the production of iso -BuAc does not require different volumes or qualities of acetic 
acid compared to the production of n -BuAc26 and therefore  that acetic acid does not 
represent a different proportion of the overall manufacturing costs for iso -BuAc 
compared to n -BuAc .27  
(26) In light of the above, the Commission considers that each of n -BuAc and iso -BuAc 
constitutes a separate product market. Regarding a possible sub -segmentatio n of n-
BuAc by purity level , the question can be left open, since under any possible product 
market definition  (n-BuAc overall, normal grade n -BuAc with a purity of 99.0% and 
high purity grade n -BuAc with a purity of at least 99.5%), the Transaction does n ot 
give rise to serious doubts as to its compatibility with the internal market.  
4.3.2.  Geographic market definition  
4.3.2.1.  Commission precedents  
(27) In the past ,28 the Commission found indications that the geographic market for the 
various types of BuAc was EEA -wide, but h as ultimately left the precise scope of 
the market open.  
4.3.2.2.  The Notifying Party’s view  
(28) The Notifying Party agrees with this view.29 
4.3.2.3.  Result of the market investigation and conclusion  
(29) The market investigation was not conclusive on whether the market for BuAc  is 
worldwide  or a regional market encompassing the EEA and Turkey  (“EEA + 
Turkey”) . 30 
(30) In light of the above, the Commission considers that the question of whether the 
relevant geographic market for BuAc is worldwide,  the EEA + Turkey , or the EEA  
can be le ft open , since the Transaction does not give rise to serious doubts as to its 
compatibility with the internal market, under any of these three possible geographic 
market definitions .  
                                                 
24  See replies to question 8, Q1 – Questionnaire to acetic acid customers.  
25  See replies to question 15, Q1 – Questionnaire to acetic acid customers . 
26  See replies to question 5, Q1 – Questionnaire to acetic acid customers.  
27  See replies  to question 7, Q1 – Questionnaire to acetic acid customers.  
28  See Case M. 7858 INEOS / Celanese assets.  
29  See Form CO paragraphs 6.35 – 6.37.  
30  See replies to question s 22 and 22.1 , Q1 – Questionnaire to acetic acid customers.  
 
7 4.4. Acrylonitrile (“ACN”)  
(31) ACN is an intermediate chemical building block use d in the production of a variety 
of downstream products, including acrylic fibre, engineering thermoplastic resins, 
adiponitrile, acrylamide and acrylonitrile butadiene rubber.  
4.4.1.  Product market definition  
4.4.1.1.  Commission precedents  
(32) In the past, the Commission found that ACN was a distinct product market ,31 
without considering  the potential existence of any further sub -segmentations.  
4.4.1.2.  The Notifying Party’s view  
(33) The Notifying Party agrees with th e view  that ACN is a distinct product market, but 
argues that any furt her segmentation of the product market can be left open, as the 
Proposed Transaction does not lead to any significant impediment to effective 
competition in the ACN market on any plausible basis .32 
4.4.1.3.  Result of the market investigation and conclusion  
(34) All ACN respondents state that ACN is a distinct product market that should not be 
further segmented .33 
(35) In light of the above, the Commission considers that the relevant product market for 
ACN is a separate  market without any further sub -segmentations.  
4.4.2.  Geographic m arket definition  
4.4.2.1.  Commission precedents  
(36) In the past, the Commission considered that the relevant geographic market for ACN 
could be worldwide, EEA wide and EEA wide + Turkey, but ultimately left the exact 
scope of the geographic market open.34 
4.4.2.2.  The Notifying Party’s view  
(37) The Notifying Party submits that the relevant geographic market for ACN is global, 
and cannot be narrower than EEA + Turkey.35 The Notifying Party argues that ACN 
is easily transportable, despite its hazardous nature, which is evidenced by the fact 
that INEOS’ ACN plant in Green Lake, USA, exports […]% of its production to 
Asia, Europe, Mexico and South America. The Notifying Party also explains that the 
transportation costs for ACN are low, representing 5% – 10% of the delivery price, 
and that there are high levels of imports of ACN into the EEA, due to the historic 
surplus situation in Asia and the USA. Finally, the Notifying Party notes that while 
                                                 
31  See Cases M.5238 INEOS / BASF assets and M.7614 – CVC Capital Partners / Royal DM (Fibre 
Intermediates and Composite Resins).  
32  See Form CO paragraph  6.110 . 
33  See replies to question s 20 & 21 , Q1 – Questionnaire to acetic acid customers.  
34  See Cases M.5238 INEOS / BASF assets  and M.7614 – CVC Capital Partners / Royal DM (Fibre 
Intermediates and Composite Resins) . 
35  See Form CO paragraph s 6.113 – 6.114 . 
 
8 the general tariff on ACN from third countries stands at 6,5%, ACN currently falls 
within an auto nomous tariff quota system ( in the EU, such  quotas  can be opened in 
some economic sectors in order to stimulate competition inside the EU. They are 
normally granted to raw materials, semi -finished goods or components not available 
in the EU in sufficient q uantities36), whose latest amendment provides for 60kt of 
ACN per annum (representing around [5-10]% of the total EEA + Turkey 
consumption) to be imported from third countries tariff -free. 
(38) In support of the fact that the ACN market cannot be narrower tha n EEA + Turkey, 
the Notifying Party explains (i) that ACN is included within the free movement 
requirements for certain goods as part of the EU -Turkey Customs Union, (ii) that 
exports of ACN to Turkey represented 53% of the ACN exported from the EEA in 
2019, (iii) that Turkey is the leading national consumer of ACN within the EEA+ 
Turkey  area, and its total annual demand is not met by local production, and (iv) that 
Turkey is home to Aksa, the leading producer of acrylic fibre in the EEA +  Turkey  
area, which is the principal downstream application for ACN, representing 
approximately […]% of total use of ACN worldwide.  
4.4.2.3.  Result s of the market investigation and conclusion  
(39) Respondents  in the market investigation unanimously  consider the market for ACN 
to be worldwide .37 
(40) In any event , the Commission considers that the question of whether the relevant 
geographic market for ACN  is worldwide , EEA + Turkey , or EEA  can be left open , 
since  the Transaction does not give rise to serious doubts as to its compatibility  with 
the internal market , under any of these three possible geographic market definitions.  
4.5. Vinyl acetate monomer  (“VAM ”) 
(41) VAM is a commodity chemical derived from acetic acid. Among other uses it serves 
as an input for the manufacture of S -PVC co -polymers.38 
4.5.1.  Product market definition  
4.5.1.1.  Commission precedents  
(42) The Commission has previously found VAM to constitute a separate product market 
that should not be further segmented. 39 
4.5.1.2.  The Notifying Party’s view  
(43) INEOS agrees with this product market definition.  
                                                 
36  See https://ec.europa.eu/taxation_customs/business/calculation -customs -duties/what -is-common -customs -
tariff/tariff -quotas_ en#heading_1  
37  See replies to questions 22 and 22.1 Q1 – Questionnaire to acetic acid customers.  
38  The potential vertical relationship s between acetic acid and VAM  as well as VAM  and S -PVC co -
polymers are discussed in paragraph s (60)-(66).  
39  Case M.3625 Blackstone / Acetex.  
 
9 4.5.1.3.  Conclusion  
(44) The Commission  considers that the relevant product market for VAM  is a separate 
market without any further sub -segmentations . 
4.5.2.  Geographic market definition  
4.5.2.1.  Commission precedents  
(45) The Commission has previously found that the relevant geographic mar ket for VAM 
is world -wide in scope. 40 
4.5.2.2.  The Notifying Party’s view  
(46) INEOS agrees with this geographic market definition.  
4.5.2.3.  Conclusion  
(47) The Commission considers  that the relevant geographic market for VAM  is world -
wide  
4.6. S-PVC co -polymers  
(48) S-PVC co -polymers , are the  result of the polymerization of a molecule of PVC with 
another monomer (a co -monomer), such as VAM.  41 
4.6.1.  Product market definition  
4.6.1.1.  Commission precedents  
(49) The Commission has previously considered S -PVC co -polymers as part of its 
investigation into the relevant  market for commodity S -PVC, finding that S -PVC co -
polymers are not part of the commodity S -PVC market. 42 
4.6.1.2.  The Notifying Party’s view  
(50) INEOS submits that S -PVC co -polymers should be considered to comprise a 
separate product market from other types of S -PVC . 43 
4.6.1.3.  Conclusion  
(51) The Commission considers, for the purposes of this Decision, that the relevant 
product market  for S -PVC co -polymers is a separate market . 
                                                 
40  Case M.3625 Blackstone / Acetex.  
41  The potential vertical relationship s between acetic acid and VAM  as well as VAM  and S -PVC co -
polymers are discussed in paragraph s (60)-(66). 
42  See Case M.6905 INEOS / Solvay / JV . 
43  See Form CO paragraph  6.150.  
 
10 4.6.2.  Geographic market definition  
4.6.2.1.  Commission precedents  
(52) The Commission has not specifically previously considered the geographic market 
for S -PVC co -polymers. However, the Commission has considered the geographic 
market for commodity S -PVC, finding that the relevant geographic scope was North 
West Europe (“NWE”) , wider Western Europe or  the EEA. 44 
4.6.2.2.  The Noti fying Party’s view  
(53) INEOS considers that appropriate geographic market for S -PVC co -polymers is at 
least EEA -wide, although the precise geographic market can be left open in this case, 
as no competition concerns arise under any definition.  
4.6.2.3.  Conclusion  
(54) The Co mmission considers that the question of whether the relevant geographic 
market for S -PVC co -polymers is NW E, Western Europe, or EEA, can be left open, 
since the Transaction does not give rise to serious doubts as to its compatibility with 
the internal mark et, under any of these three possible geographic market definitions.  
5. ASSESSMENT  
5.1. Overview of affected markets  
(55) The Transaction does not give rise to horizontally affected markets.45 The Parties 
noticeably overlap with respect to the manufacture of EtAc and n-BuAc, but the 
Parties’ combined market shares at worldwide level remain well below the 20% 
threshold for horizontally affected markets .46 
(56) For EtAc, combined ma rket shares would remain at around [5-10]% of sales both on 
a value and volume basis  at worldwide level .47  
(57) Concerning  n-BuAc  (overall and high purity grade) , the Notifying Party argues that 
market shares do not differ materially between th em. 48. The combined market shares 
both in value and in volume  would be around [5-10]% for a worldwide  market 
definition . Under an EEA + Turkey and an EEA  geographic market  definition , only 
INEOS is active since BP’s chemical business is only active in n-BuAc  (overall and 
high purity grade)  through a JV with Yaraco  in China,  […]49. Therefore , the 
                                                 
44  See Case M.6905 INEOS / Solvay / JV . 
45  See Fo rm CO paragraphs 6.11 and 6.13 – 6.57.  
46  In past decisional practice, the Commission has considered the geographic market definition for EtAc to 
be worldwide (see M.3625 – Blackstone / Acetex, para. 149). In the market investigation of the present 
case, a ll respondents that produce or source EtAc confirmed that the geographic market for EtAc is 
worldwide in scope ( see replies to question 22, Q1 – Questionnaire to acetic acid customers). The 
Notifying Party submits that [60-70]% of all sales of EtAc in the EEA in 2019 were imports from outside 
the EEA (see Form CO, para. 6.20).  
47  Yaraco, a JV of BP’s chemical business […], See Annex 2 Form CO and Reply of the Notifying Party to 
RFI 5, of 09.09.2020.   
48  See Annex 2 Form CO and Reply of the Notifying Party to RFI 5, of 09.09.2020.  
49  See Form CO paragraph  6.40.  
 
11 horizontal  overlaps for (an overall and high purity grade) n -BuAc will not be further 
discussed in the present decision.  
(58) Several vertical relationships arise as a result of the transaction.50 Those between (i) 
the production of acetic acid by BP’s chemicals business (upstream) and the 
production of  n-BuAc51, EtAc52, isopropyl acetate (“IPAC”),53 purified isophthalic 
acid (“PIA”)54 and trimellitic anhydride (“TMA”)55 by INEOS (downstream), (ii) the 
production of metaxylene by BP’s chemicals business (upstream)56 and the 
production of PIA by INEOS (downstream) and (iii) Lotte BP Chemical Co.’s 
(“Lotte” Korea) vinyl acetate monomer (“VAM”) activities upstream (in which BP’s 
chemicals business has a [...]% interest)57 and INEOS’ downstream activities in S -
PVC co -polymers58 do not give rise to vertically affected markets. Therefore, all of 
these vertical relationships will not be further discussed in the present decision.  
(59) The Transaction gives rise to the following  vertically affected markets,59 namely  
between  (i) the production of a cetic acid by BP’s chemicals business (upstream) and 
the production of iso -BuAc  (by INEOS ) (downstream)  and (ii) the production of 
acetic acid by BP’s chemicals business (upstream) and the production of ACN by 
INEOS  (downstream). Both links are affected on ly due to downstream market shares 
as upstream market shares remain below 30%.  
(60) Finally, given INEOS’ plan to build a new plant in the UK to produce VAM, in the 
future60, the Transaction might give rise to a potential  horizontal overlap (in the 
market for the manufacture of VAM world -wide ), as well as to two additional 
potential vertica l relationships  (between acetic acid upstream and VAM downstream , 
as well as between VAM upstream and INEOS’ downstream activities in S -PVC co -
polymers).  
(61) Currentl y, INEOS does not produce VAM, and only BP’s chemicals business does 
so, through a JV in Korea.  BP’s chemicals business currently has a market share of 
less than [0-5]% at worldwide level). If INEOS’ plant becomes operational,61 which 
is expected by 2022, it would represent  less than [0-5]% capacity share in the supply 
                                                 
50  See Form CO paragraphs 6.11 and 6.58 – 6.176.  
51  INEOS’ market shares in volume and value under both an EEA and an EEA + Turkey geographic market 
definition are [20 -30]% and [20 -30]% respectively.  
52  The combined market share of the Parties, under a worldwide geographic market definition, which is in 
line with Commission precedents and the results of the market investigation is around [5 -10]%, both in 
volume and in value terms.  
53  INEOS’ market sh ares in volume and value under an EEA geographic market definition, which is the 
narrowest in line with Commission precedents, are [20 -30]%.  
54  INEOS’ market shares in volume and value under an EEA geographic market definition, which is the 
narrowest in li ne with Commission precedents, are [5 -10]%.  
55  INEOS’ market shares in volume and value under a worldwide and an EEA geographic market definition, 
are below [20 -30]%.  
56  BP’s chemicals business […]. Its worldwide market share is below [30 -40]%.  
57  Lotte’s market shares in volume and value under a worldwide geographic market definition, which is in 
line with Commission precedents are below [5 -10]%.  
58  INEOS’ market shares in volume and value under an EEA, a Western Europe and a Northern Western 
Europe geogra phic market definition, which are the only plausible in line with Commission precedents are 
below [20 -30]%.  
59  See Form CO paragraph 6.174.  
60  The target date for operations is 2022 ([…]).  
61  The Notifying Party submits that the building of this plant is [ …]. 
 
12 of VAM in the world -wide  market (in proportion of the total production capacity in 
2019).  
(62) The Notifying Party argues that these potential horizontal and vertical relationships 
are not merger -specific since INEOS’ public announcement that it planned to build a 
new VAM plant preceded discussion of the proposed Transaction by two and a half 
years; and its public announcement that it had chosen Hull (the same city where 
BP’s chemicals business has  its acetic acid production plant) as the site of the new 
VAM plant preceded discussion of the proposed Transaction by over one year. 
However, the validity of such an argument in the context of the current assessment 
appears debatable.  
(63) As regards the potential horizontal relationship arising from an entry of INEOS in 
the VAM worldwide  market  the Commission  notes that  the combined market share 
of the Parties on a capacity basis would be around [5-10]%. 
(64) As regards the potential vertical relationship between acetic acid (upstream) and the 
combined activities of BP’s chemicals business and INEOS for VAM (downstream), 
the Commission notes that BP’s chemicals business’ market shares upstream in the 
worldwide market for the manufacture of acetic acid in  2019 are [10-20]% by value, 
[20-30]% by volume  and [10-20]% by capacity.  
(65) As regards the potential vertical relationship between the combined activities of BP’s 
chemicals business and INEOS for VAM (upstream) an d INEOS’ downstream 
activities in S -PVC co -polymers (downstream), the Commission notes that INEOS’ 
market share s in the downstream S -PVC co -polymers markets are [20-30]%  in 
NWE, [20-30]%  in Western Europe, and [20-30]%  in the EEA.  
(66) Finally, INEOS, not bein g yet present on the VAM market, currently has no VAM 
customers. Therefore,  at present there are no potential purchasers of VAM from 
INEOS for the manufacture of S -PVC co -polymers which could post -transaction be 
foreclosed in the context of a potential inp ut foreclosure strategy.  
(67) As a result, these potential horizontal and vertical relationships that would arise from 
building the VAM plant in the UK will not be further discussed in the present 
decision  since they would not lead to either horizontally or vertically affected 
markets . 
5.2. Framework of the competitive assessment of vertical links  
(68) The Commission’s Guidelines on the assessment of non -horizontal mergers under 
the Merger Regulation (the "Non -Horizo ntal Merger Guidelines") distinguish 
between two main ways in which vertical mergers may significantly impede 
effective competition, namely input foreclosure and customer foreclosure.62  
(69) For a merger to raise input foreclosure competition concerns, the merg ed entity must 
have a significant degree of market power upstream.63 In assessing the likelihood of 
an anticompetitive input foreclosure strategy, the Commission has to examine 
whether (i) the merged entity would have the ability to substantially foreclose access 
                                                 
62  OJ L 24, 29.1.2004, p. 1.  
63  Non-horizontal Merger Guidelines, paragraph 35.  
 
13 to inputs ; (ii) whether it would have the incentive to do so; and (iii) whether a 
foreclosure strategy would have a significant detrimental effect on competition 
downstream.64  
(70) For a merger to raise customer foreclosure competition concerns, the merg ed entity 
must be an important customer with a significant degree of market power in the 
downstream market.65 In assessing the likelihood of an anticompetitive customer 
foreclosure strategy, the Commission has to examine whether  (i) the merged entity 
would have the ability to foreclose access to downstream markets by reducing its 
purchases from its upstream rivals; (ii) whether it would have the incentive to do so; 
and (iii) whether a foreclosure strategy would have a significant detrimental effect 
on consum ers in the downstream market.66  
5.3. Vertical relationship between the production of acetic acid by BP’s chemicals 
business (upstream) and the production of iso -BuAc by INEOS  (downstream) .  
5.3.1.  Market structure  
(71) This vertical link is affected downstream only because  INEOS’ market share s in the 
sales of iso -BuAc in the EEA  + Turkey and EEA  are above 30%, namely [30-40]%  
and [30-40]%  respectively (both on a value and on a volume basis ). On a worldwide  
basis, INEOS’ market share is just below [10-20]% on a value and on a volume 
basis. 67  
(72) On the upstream  market , only BP’s chemicals business manufactures acetic acid.  
BP’s chemicals business’ market share s upstream in the worldwide market for the 
manufacture of acetic acid68 in 2019 69 are [10-20]%  by value, [20-30]%  by volume 
and [10-20]%  by capacity .70  
(73) For both geographic market definitions, EEA + Turkey and EEA, INEOS is the 
market leader  in the supply of iso -BuA c, while OQ71 is second and the remainder of 
demand is covered by imports. The Notifying Party submits that i mporters of i so-
BuAc in the EEA + Turkey and the EEA include  Dow US, Eastman U,  Oxea US, 
Dmitrievsky Chemical Russia, Eurochem Russia, Jiangyin Baichuan China and 
Shandong Yanco China.  
                                                 
64  Non-horizontal Merger Guidelines, paragraph 32 . 
65  Non-horizontal Merger Guidelines, paragraph 61.  
66  Non-horizontal Merger Guidelines, paragraph 59.  
67  It is recalled that the Parties’ combined market share for n -BuAc on a worldwide basis is around [5 -10]% 
on a value and on a volume basis, see paragraph (55). INEOS ’ market share in n -BuAc and high purity n -
BuAc under the EEA + Turkey and EEA geographic market definitions are below 30% both on value and 
on volume. [...].  
68  See Annex 3 Form CO.  
69  These market shares are obtaining by adding to BP’s chemicals busines s worldwide market share the 
market shares of all the JVs where it has shareholding interests in. Lower market shares would be obtained 
if the market shares of the JVs were allocated to BP’s chemicals business in proportion of the level of 
equity share it holds in each of them on global level.  
70  As regards BP’s chemicals business’ capacity share in acetic acid worldwide in 2019, it amounts to [5 -
10]% (including the capacity of the BBPA JV with Petronas in Malaysia […]) and [10 -20]% including the 
capacities  of all the JVs [...]. 
71  Formerly known as Oxea.  

 
15 and BP with respect to acetic acid,74 excluding INEOS’ acetic purchases that are 
already made from BP’s chemicals business, INEOS’s acetic acid purchases only 
represen ts [0-5]%  of the sales of acetic acid in the EEA made by acetic acid 
producers other than BP’s chemicals business. As such, INEOS therefore does not 
appear to be an important purchaser of acetic acid overall (while BP’s chemicals 
business does not procure  acetic acid on the merchant market).  
(79) All these elements would tend to indicate that the combined entity would lack the 
ability to engage in a potential customer foreclosure strategy aiming at restricting 
access to other acetic acid manufacturers to INEOS as a purchaser of acetic acid.  
(80) The Notifying Party does not bring forward any argument regarding the combined 
entity’s incentive to engage in a potential customer foreclosure strategy or the 
potential effects of such a customer foreclosure.  
5.3.3.  The Commission ’s assessment  
(81) As regards a  potential customer foreclosure strategy  (under an EEA + Turkey, or 
EEA market definition) , the Commission firstly notes that the Notifying Party’s 
market shares for iso -BuAc, are [30-40]% and [30-40]% respectively (both on a 
value and on a volume basis ). Its main EEA based competitor has a n approximately  
[20-30]% market share under all scenarios, while the rest is covered by imports.  
(82) The Commission also notes that there are many different  downstream uses of acetic 
acid, apart from  the manufacture of BuAc (see paragraph (77)) and that the 
Notifying Party’s purchases of acetic acid , for all uses,  are low (see paragraph (78)).  
(83) Additionally, the Commission recalls that the geographic scope of the acetic acid 
market is worldwide. Consequently, manufacturers of acetic acid can sell to 
customers worldwide and are not limited to European customers.   
(84) It is therefore h ighly unlikely that INEOS would be able to run a successful customer 
foreclosure, by stopping, post -transaction , to purchase acetic acid from its current 
suppliers. This was confirmed by a vast majority 75 of competitors in acetic acid , 
who consider that po st Transaction  there would be still a sufficient number of 
customers available for acetic acid, even if the merged entity would stop purchasing 
from them.  
(85) Moreover, half of the competitors indicate that the merged entity would not have an y 
incentive to no longer purchase acetic acid from them .76 The Commission takes note 
that a number of  dissenting  replies  suggest that the aim of the  merged entity would 
be to internalise in its own upstream division production of the acetic acid volumes it 
                                                 
74  This already important level of integration between the Parties before the Transaction results from t he fact 
that INEOS has manufacturing facilities located in Hull, United Kingdom, the same place where BP has 
its main manufacturing plant for acetic acid, so  that INEOS already purchases [70 -80]% of its overall  
needs for acetic acid from BP’s  chemicals business . 
75  See replies to question 9, Q2 – Questionnaire to acetic acid c ompetitors . 
76  See replies to question 10, Q2 – Questionnaire to acetic acid competito rs. 
 
16 needs, which would change the merged entity’s purchasing strategy for acetic acid 
on the market .77 
(86) However , the majority of competitors do not foresee any impact on the market for 
acetic acid as a result  of the Transaction , neither on price, quality, choice for 
customers or product innovation . 78 
(87) In light of the above, the Commission considers that the Transaction does not give 
rise to serious doubts based on costumer foreclosure.  
(88) As regards a  potential input foreclosure strategy , the Commission notes that 
several customers of acetic acid  responding to the market investigation , albeit only a 
minority,  submit that there would not be a sufficient number of suppliers for acetic 
acid if the merged entity would stop selling to them.79 Half of all acetic acid 
customers expect an increase in prices of acetic acid as a result of the Transaction, 
while the other half does not consider the Transaction to have an impact on prices.80 
However, a clear majority of acetic acid customers do not co nsider that the merged 
entity would have an incentive to stop supplying them with acetic acid.81 In this 
context, t he Commission  notes that especially downstream competitors in the market 
of BuAc seem to be critical of the Transaction.  
(89) The Commission recal ls that the market investigation clearly indicates that acetic 
acid is a worldwide market, in line with Commission’s past practice and the fact that 
the majority of acetic acid sold in the EEA is indeed imported from third countries. 
82 It is recalled that on the global acetic acid market the combined market shares of 
the Parties do not exceed [20-30]%83. The Commission considers that this low 
market share level does not appear to give the merged entity the ability to engage in 
input foreclosure of acetic aci d to the detriment of its downstream competitors.  
(90) Account has also to be taken of the fact that even if the merged entity would source 
the entirety of its demand for acetic acid captively, it would still have free capacities 
of at least […] of all its acet ic acid production capacity.  This suggest that the merged 
entity would have an economic incentive to continue supplying acetic acid to the 
merchant market. This is supported by the fact that a clear majority of acetic acid 
customers do not consider that th e merged entity would have an incentive to engage 
in input foreclosure.  
(91) As regards specifically concerns expressed by downstream competitors in the 
production of BuAc, a ccording to data submitted by the Notifying Party, demand of 
                                                 
77  See replies to question 10.1, Q2 – Questionnaire to acetic acid competitors  “The transaction may affect the 
parties' purchasing strategy for acetic acid ” ; “INEOS , once it is backwards integrated into BP's acid will 
no longer purchase the acid that it currently buys from us ”. 
78  See replies to question s 11 & 12 , Q2 – Questionnaire to acetic acid competitors  
79  See replies to question 23, Q1 – Questionnaire to acetic acid customers.  
80  See replies to question 25 – Questionnaire to acetic acid customers.  
81  See replies to question 2 4 – Questionnaire to acetic acid customers.  
82  See paragraph (16) above.  
83  Main competitors on a global market for acetic acid in 2019 where Celanese ( [10-20]% market share, 
volume based), Sopo C hemical ( [5-10]%), Yankuang ( [5-10]% ) and Chang Chun ( [5-10]% ). 
 
17 acetic acid for overall BuAc production in the EEA accounts only for around [5-
10]% of all worldwide sales of acetic acid  ([5-10]% in the EEA)84.  
(92) Moreover, r eplies to the market investigation confirmed the argument of the 
Notifying Party that the production of iso -BuAc  does not require different volumes 
or qualities of acetic acid compared to the production of n -BuAc85 and therefore  that 
acetic acid does not represent a different proportion of the overall manufacturing 
costs for iso -BuAc compared to n -BuAc.86 It is theref ore doubtful that the merged 
entity can successfully foreclo se its downstream iso-BuAc competitors by 
preventing them to gain sufficient access to acetic acid volumes.   
(93) Moreover, account has to be taken of the fact that iso -BuAc production represents a 
very small proportion of the total production for BuAc.  
(94) Moreover, downstream competitors , including those for BuAc,  do not only rely on 
supplies o f the merged entity , as they already multisource.87 Finally, the Commission 
notes the Notifying Party ’s argument concerning  the presence of traders of acetic 
acid (such as Helm or Cellmark ) that would have the ability to sell […] of acetic acid  
per year .88 This represents  more than the double of the volume of acetic acid BP’s 
chemicals business currently sells from its production facility in Hull to the three 
biggest BuAc competitors  of INEOS  in the EEA, which would make it difficult for a 
vertically integrated merged entity  to selectively target any  acetic acid  input 
foreclosure strategy to specific downstream  (BuAc) competitors . In light of the 
above, taking account of the results on the market investigation and of all the 
evidence available to it, the Commission considers that the Transaction does not 
raise serious doubts as to its compatibility with the inter nal market in relation to the 
vertical link between acetic acid (upstream) and iso-BuAc  (downstream).  
5.4. Vertical relationship between the production of acetic acid by BP’s chemicals 
business (upstream) and the production of acrylonitrile (“ACN”) by INEOS 
(downstream) . 
5.4.1.  Market structure  
(95) This vertical link is affected downstream only because INEOS’ market shares in the 
sales of ACN in the EEA + Turkey and EEA are above 30%, namely just below [40-
50]% and around [40-50]% respectively (both on a value and on a vol ume basis ) On 
a worldwide  basis, INEOS’ market share is just below [10-20]% on a value and on a 
volume basis.89  
(96) On the upstream, only BP’s chemicals business manufactures acetic acid. BP’s 
chemicals business’ market shares upstream in the worldwide market for the 
manufacture of acetic acid90 in 2019 91 are [10-20]% by value, [20-30]% by volume 
and [10-20]% by capacity.  
                                                 
84  See Form CO table 6.3.  
85  See replies to question 5, Q1 – Questionnaire to acetic acid customers.  
86  See replies to question 7, Q1 – Questionnaire to acetic acid customers.  
87  See replies to question 10  – Questionnaire to acetic acid customers.  
88  See the Notifying Party’s reply to RFI 4, of 2.9.2020 . 
89  See Annex 2 Form CO and Reply of the Notifying Party to RFI 5, of 09.09.2020 . 
90  See Annex 3 Form CO. 

 
19 worldwide geographic scope, INEOS’ market shares downstream at worldwide level 
would probably constitute a better proxy, for the purpose of assessing potential 
customer foreclosure.  
(103)  More generally, as mentioned above in paragraph  (78), the Notifying Party submits 
that an even better proxy for INEOS’ importance as a purchaser of acetic acid is the 
proportion of overall acetic acid sales that INEOS ’ purchases for all downstream 
applications represent. These represent  92 only [0-5]% of the global acetic acid 
market and [10-20]% of acetic acid sales in the EEA ( [0-5]% of the sales of acetic 
acid in the EEA excluding INEOS’ purchases that are already made from BP’s 
chemicals business).  
(104)  All these elements would tend to indicate that the combined entity would lack the 
ability to engage in a potential customer foreclosure strategy aiming at restricting 
access to other acetic acid manufacturers to INEOS as  a purchaser of acetic acid.  
(105)  The Notifying Party does not bring forward any argument regarding the combined 
entity’s incentive to engage in a potential customer foreclosure strategy or the 
potential effects of such a customer foreclosure, given the very h ypothetical nature 
of such a customer foreclosure scenario (mainly due to the current absence of 
potential customers of BP’s chemicals business active in ACN that the combined 
entity could foreclose).  
5.4.3.  The Commission’s assessment  
(106)  As regards a  potential cust omer foreclosure strategy (under an EEA + Turkey, or 
EEA market definition), the Commission firstly notes that the Notifying Party’s 
market shares for ACN, are around [40-50]% and [40-50]% respectively (both on a 
value and on a volume basis ). Its main EEA based competitor has a market share of 
[20-30]% in the EEA + Turkey and of [40-50]% in the EEA, while the rest is 
covered by a Turkish producer and imports from further afield.  
(107)  The Commission also notes that there are other downstream uses of acetic acid, apart 
from the manufacture of ACN (see paragraph (77)) and that the Notifying Party’s 
purchases of acetic acid, for all uses, are low (see paragraph (78)).  
(108)  Additionally, the Commission recalls that the scope of the acetic acid market is 
worldwide. Consequently, manufacturers of acetic acid can sell  to customers 
worldwide and are not limited to European customers.  
(109)  It is therefore highly unlikely that INEOS would be able to run a successful customer 
foreclosure  strategy , by stopping, post -transaction to purchase acetic acid from its 
current suppliers.  This was confirmed by a vast majority 93 of competitors in acetic 
acid who consider that post Transaction  there would be still a sufficient number of 
customers available for acetic acid, even if the merged entity would stop purchasing 
from them.  
                                                 
92  See Form CO paragraphs 7.32 and 7.33.  
93  See replies to question 9, Q2 – Questionnaire to acetic acid c ompetitors . 
 
20 (110)  Moreover,  half of the competitors indicate that the merged entity would not have any 
incentive to no longer purchase acetic acid from them.94 The Commission takes note 
that a number of dissenting replies suggest that the aim of the merged entity would 
be to internal ise in its own upstream division production of the acetic acid volumes it 
needs , which would change the merged entity’s purchasing strategy for acetic acid 
on the market .95 
(111)  However, the majority of competitors do not foresee any impact on the market for 
acetic acid as a result of the Transaction, neither on price, quality, choice for 
customers or product innovation. 96 
(112)  As regards a  potential input foreclosure strategy , the Commission notes that there 
were no indications of concern about input foreclosure for ACN.  
(113)  In light of the above, taking account of the results on the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in r elation to 
the vertical link between acetic acid (upstream) and ACN (downstream).  
5.5. General conclusion on vertical effects  
(114)  In the light of the considerations in paragraphs (68) to (113)  the Commission 
concludes that the Transaction does not raise serious doubts as to its compatibility 
with the internal market due to vertical effects.  
6. CONCLUSION  
(115)  For the above reasons, the Euro pean Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA  Agreement.   
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission  
 
                                                 
94  See replies to question 10, Q2 – Questionnaire to acetic acid competito rs. 
95  See replies to question 10.1, Q2 – Questionnaire to acetic acid competitors  “The transaction may affect the 
parties' purchasing strategy for acetic acid ” ; “INEOS , once it is backwards integrated into BP 's acid will 
no longer purchase the acid that it currently buys from us ”. 
96  See replies to question s 11 & 12 , Q2 – Questionnaire to acetic acid competitors