The European Union (EU) Commission is investigating the proposed acquisition of Solvay’s global nylon business by BASF, under the EU Merger Regulation. The Commission is worried as the merger may reduce competition in supply of key inputs in the nylon production chain. The proposed transaction involves Solvay and BASF, two companies active in the nylon industry, where both manufacture nylon compounds and nylon fibres.

The transaction is likely to create an important player in the nylon compounds market with a market size almost double that of the closest competitor. The merged entity would also control substantial parts of the merchant markets and of the production capacities at all levels of the nylon production chain. Moreover, no other player would be similarly fully integrated in the production chain. Competitors will thus depend on the merged entity to continue to supply them with one or more essential inputs.