The Competition Authority announces the terms of Esseco's takeover bid for Ercros.

BarcelonaThe National Commission for Markets and Competition (CNMC) published this Monday the conditions imposed on the public takeover bid (OPA) by the Italian group Esseco for the Catalan multinational chemical company Ercros. In a statement, the institution itself considered that there are two markets where the company resulting from the sale would be in a situation close to monopoly.

Thus, the state competition regulator indicated in the statement that both companies, Esseco and Ercros, "overlap at the state level" in two sectors: the marketing of solid and liquid potassium hydroxide (KOH) and potassium carbonate (K₂CO₃). Specifically, the CNMC has found similarities of at least 80% in volume and 70% in value. Given this situation, if the takeover bid goes ahead, "the resulting entity" from the merger of both companies "would be far ahead of its main competitors" and would enjoy a "near-monopoly position."

However, while Esseco manufactures these two chemical products through its factories in Italy, Ercros is the exclusive supplier only to the Korean company UNID, the world's leading producer. Thus, the CNMC states in its report that, in order to go ahead with the Italian company's acquisition of Ercros, the supply contracts that Ercros currently holds with UNID will have to be terminated, in order to reduce the combined company's presence in the Spanish market. The competition authority's decision also prohibits it from signing any type of contract with UNID to import either of the two chemical components into the Iberian Peninsula for the next five years, whether direct or indirect.

In fact, the CNMC partially extends this ban to all distributors of potassium products in Spain and Portugal, with whom Esseco will also be prohibited from negotiating exclusive distribution contracts for five years from the closing of the purchase and sale transaction.

Esseco launched the takeover bid at the end of June 2024 at a price of 3.84 euros per share, a higher proposal than that of the Portuguese company Bondalti, which offered 3.60 euros per share in a takeover bid presented in March 2024. The CNMC is still analyzing the Portuguese group's offer.

Pending the Spanish government

Esseco informed the Spanish National Securities Market Commission (CNMV) on Thursday that the Competition Authority had given the green light to the takeover bid, subject to conditions. Now, the Italian company's offer only awaits approval from the Ministry of Economy, which has a period of fifteen days to authorize it or, conversely, submit the CNMV's resolution to the Council of Ministers if the minister, Carlos Cuerpo, deems it necessary to add new conditions related to the public interest.