Notice pursuant to Article 19(3) of Council Regulation No 17 concerning Case COMP/E-2/37.747 — StoHaas Joint Venture (Text with EEA relevance)
Date: 2001-04-21
Institutions: European Commission
Subjects: chemical industry, economic concentration, joint venture

21.4.2001

EN

Official Journal of the European Communities

C 117/3

Notice pursuant to Article 19(3) of Council Regulation No 17 (1) concerning Case COMP/E-2/37.747
(cid:151) StoHaas Joint Venture

(2001/C 117/03)

(Text with EEA relevance)

I. The application/notification

1. On 22 December 1999, the Commission received from
(cid:145)Stockhausen(cid:146))
Stockhausen GmbH & Co. KG (hereafter
and Rohm and Haas Company (hereafter
(cid:145)Rohm and
Haas(cid:146)) an application for negative clearance, or alter-
natively, a notification for exemption under Article 81(3)
of the EC Treaty of a joint venture agreement and a set of
other agreements concerning, inter alia, the setting up of a
joint venture in order
to produce crude acrylic acid
(hereafter (cid:145)CAA(cid:146)) at Deer Park, Texas, United States of
America, and at Marl, Germany. On 6 February 2001,
an
parties
the
concluded on 27 December
amendment
2000, which amended two provisions of
the notified
joint venture agreement in order to remove the concerns
expressed, on 14 April 2000, by the Commission
these provisions with
regarding the
Article 81 of the EC Treaty.

compatiblity of

Commission

transmitted

agreement,

the

to

Both Stockhausen and Rohm and Haas manufacture acrylic
acid such as CAA, GAA and the esters of acrylic acid as
the key raw materials for some of their products.

5. Rohm and Haas is a publicly quoted company incor-
the law of Delaware, United States of

porated under
America. It has production facilities all over the world.

6. Stockhausen is a 99,871 % subsidiary of Degussa AG.
Degussa AG is part of the E.ON Group. E.ON holds a
64,55 % stake in Degussa AG.

Degussa AG is in effect the chemicals arm of the E.ON
Group. E.ON is a German publicly quoted joint stock
company (AG).

2. CAA is not an end product, but it is used as a basis for
such as butyl acrylate

manufacturing other products
(hereafter (cid:145)BA(cid:146)) or glacial acrylic acid (hereafter (cid:145)GAA(cid:146)).

III. The notified agreements

III.1. The setting up of the joint venture

The joint venture will be solely dedicated to CAA manu-
facturing and this CAA will be entirely sold to the parent
companies.

3. In addition, on the basis of an asset purchase agreement,
Rohm and Haas will acquire Stockhausen’s German
business of (i) manufacturing, marketing, distributing and
selling BA to any and all Parties, and of (ii) marketing,
distributing and selling GAA to third parties other than
members of the group of companies to which Stockhausen
belongs.

7. The Parties are setting up a Joint Venture (2)

((cid:145)StoHaas
to manufacture CAA at

Monomer GmbH & Co. KG(cid:146),
Deer Park, Texas and at Marl, Germany.

In Germany, Stockhausen will attribute all of its Marl CAA
production capacity to a new subsidiary (hereafter (cid:145)StoHaas
Marl GmbH(cid:146)) which will be contributed to the joint
venture on the 1 January 2001.

its Deer Park production capacity, equal

In the United States, Rohm and Haas will attribute a part
of
to the
production capacity attributed by Stockhausen, to a new
subsidiary (hereafter (cid:145)ROH Delaware LP(cid:146)) which will be
contributed to the joint venture on the 1 January 2001.

II. The Parties

4. Both Rohm and Haas and Stockhausen are principally
engaged in the production of speciality chemicals. In the
chemical industry the term (cid:145)specialty chemicals(cid:146) is used to
refer to chemical compounds which have been engineered
by a chemical producer to incorporate attributes desired
for a specific end use. These are differentiated products as
distinguished from commodity chemicals, which are
inherently fungible and undifferentiated.

(1) OJ 13, 21.2.1962, p. 204/62.

8. The joint venture will be formed for an indefinite period of
time. However, it may be terminated by either Party upon
24 months written notice to take effect as of the end of
the calendar year, for the first time having an effective date
as of 31 December 2030.

(2) It should be noted that the joint venture agreement itself is actually
concluded between Rohm and Haas Texas,
Inc., ROH Venture
GmbH, Stockhausen GmbH & Co. KG and Rohm and Haas
Company.

C 117/4

EN

Official Journal of the European Communities

21.4.2001

III.2. The joint control

9. The joint venture will be jointly controlled (50/50). It will
be ultimately governed by the partners’ meeting. The
partners’ meeting decides upon changes to the partnership
increases or decreases of the capital accounts, the
deed,
approval of the annual financial statements of the joint
venture and the entering into, change or termination of
any intra-group agreements pursuant to Article 291 of the
German Aktiengesetz. All other powers of the partners’
meeting will be delegated to the Board, but the partners’
meeting may withdraw, amend or change all delegated
powers of the Board at any point of
time at its own
discretion.

III.3. The general partner of the joint venture

The Parents will contribute to the joint venture or its
subsidiaries all the technology and know-how required to
carry out its operations.

The joint venture agreement limits the joint venture’s use
of the technology licensed by third parties to its CAA
operations at Marl, Germany.

In the event that a new technology is created by the joint
venture, it will be co-owned by the Parties.

10. The general partner of the joint venture will be StoHaas
StoHaas
Management GmbH. The
Management GmbH,
the notifying parties, will be
limited partners of the joint venture. Each of the share-
holders will hold a 50 % interest in the general partner.

shareholders

i.e.

of

StoHaas Management GmbH will be responsible for the
management and representation of
the joint venture.
StoHaas Management GmbH will have two Managing
Directors,
StoHaas Management GmbH
jointly. The Managing Directors will prepare annual
investments and financial budgets and short-term profit
and loss statements for the joint venture.

representing

III.4. The structure of the joint venture

11. The joint venture will have a Board, which will exercise
the powers delegated to it by the partners’ meeting, advise
the general partner and its management and make overall
policy decisions with respect to the business and affairs of
the venture. Unless otherwise decided by the partners’
meeting, each of the Parties has the right to appoint two
the Board are
the Board. Resolutions of
members of
adopted unanimously.

The Board may give instructions, which shall be binding
upon the Managing Directors. Furthermore, the Managing
Directors of StoHaas Management GmbH shall not,
without the consent of the Board, take any actions or
enter into any business transactions beyond the ordinary
scope of business of the joint venture entity.

III.5. The joint venture activities at Marl and in Deer Park

13. The joint venture will be solely dedicated to CAA manu-
facturing and this CAA is entirely sold to the two parent
companies. The parent companies will then use the CAA
purchased from the joint venture for further production.
The CAA produced by the joint venture is >90 % pure
acrylic acid.

14. The joint venture will manufacture CAA in Marl. Stock-
hausen will continue to run the Marl CAA plant on behalf
of the joint venture under an operating agreement.

All of the CAA manufactured in Marl will be owned by the
joint venture, and sold to the parent companies as the only
(the supply
customers under
agreement between StoHaas Marl GmbH and Stockhausen
and the supply agreement between StoHaas Marl GmbH
and Rohm and Haas). This is the joint venture’s sole
activity in Marl.

two supply agreements

15. The joint venture will also manufacture CAA in Deer Park.
Rohm and Haas Texas will continue to run the CAA plant
in Deer Park on behalf of the joint venture, under an
operating agreement.

12. The entity operating each of the joint venture’s facilities
(Rohm and Haas in Texas and Stockhausen at Marl) will
have employees and these employees will provide services
to the joint venture pursuant to the respective operating
agreements.

All of the CAA manufactured for the joint venture in Deer
Park will be owned by the joint venture and sold to the
parent companies as the only customers under two supply
agreements (the supply agreement between ROH Delaware
LP and Stockhausen and the supply agreement between
ROH Delaware LP and Rohm and Haas). This will be the
joint venture’s sole activity in Deer Park.

21.4.2001

EN

Official Journal of the European Communities

C 117/5

16. The CAA will be turned into either GAA or BA, as

explained in more detail below.

22. Stockhausen will continue to operate the BA facility on
behalf of Rohm and Haas under a BA operating agreement.

III.6. Production of GAA in Marl

17. The majority of the CAA purchased by Stockhausen from
the joint venture in Marl will be further purified by Stock-
hausen into GAA (1). GAA is a >95 % pure acrylic acid.
The GAA is
internal use,
required for Stockhausen’s
primarily to produce super absorbent polymers (SAP)
and to supply other GAA-consuming businesses within
the E.ON Group.

18. The transformation from CAA into GAA for both Parties
will be carried out using Stockhausen-owned equipment.

19. A toll manufacturing agreement between Stockhausen and
Rohm and Haas will be used to allow Stockhausen to
convert the Rohm and Haas-owned CAA into GAA for
Rohm and Haas. Stockhausen will be remunerated by
Rohm and Haas. Rohm and Haas’ portion of GAA is
required for internal use and for external sales on the
GAA merchant market.

III.7. Production of BA by Rohm and Haas in Marl

20. The remainder of the CAA produced by the joint venture
at Marl will be further processed by Rohm and Haas into
BA. BA is produced through the esterification of CAA with
butanol. At Marl, this conversion will take place in the
facilities that Stockhausen sold to Rohm and Haas on 1
January 2000 on the basis of an asset sale agreement. In
addition, all
the Stockhausen customers for BA (both
internal to Degussa and in the external merchant market)
and the external merchant market customers for GAA,
have been included in this agreement.

21. The asset purchase agreement provides that Stockhausen
(or any member of the Degussa affiliated group) shall not,
for a defined period from 1 January 2000 on, compete
with Rohm and Haas in the marketing, distribution or sale
of BA and or GAA to any third party in any country in the
world.

23. All BA produced in the Marl plant will be owned by Rohm
and Haas. The majority of the BA produced in the existing
Marl plant will be used to continue to supply the newly
acquired BA customers. Any additional BA production
may be used by Rohm and Haas to offset their captive
BA needs in Europe.

24.

In order to meet its entire European BA demand, Rohm
and Haas will (at its sole expense) construct at the Marl
site a BA plant. The timing for this expansion will be in
conjunction with the joint venture’s CAA expansion,
currently estimated for July 2003.

III.8. Production of FGAA in Deer Park

required for Stockhausen’s

25. All the CAA purchased by Stockhausen from the Joint
Venture in Deer Park will be further purified into
FGAA (2). FGAA is a > 95 % pure acrylic acid. The
FGAA is
internal use to
produce SAP in North America. A toll manufacturing
agreement will be used to allow Rohm and Haas to
the Stockhausen-owned CAA into FGAA for
convert
Stockhausen. CAA needed for the toll-manufacturing of
FGAA under
this Agreement will preferentially be
provided from the joint venture.

IV. The Commission intention

26. The Commission intends to adopt a favourable position
with regard to the notified agreements
summarised
above. Before doing so, it invites the interested parties to
submit their comments within one month of the date of
publication
reference
COMP/E-2/37.747, to

quoting

notice,

this

of

European Commission
Directorate General for Competition
Directorate E
Rue Joseph II/Jozef II-straat 70
B-1049 Brussels
(fax (32-2) 299 24 64).

(1) In North America GAA is also known as FGAA (Flocculent-GAA).

(2) FGAA is a US term for GAA.