HENKEL/LOCTITE (Start of full phase investigation)
PRESS RELEASE
The Italian Competition Authority initiated a proceeding to investigate the acquisition by the Henkel group of Loctite Corporation and all the companies controlled by the U.S. group, including Loctite Italia S.p.A. In the course of the investigation, the Authority intends to verify if such a merger is likely to create or strengthen a dominant position to reduce competition substantially and on a lasting basis in the national markets of adhesives and sealants. Within these markets, the Authority distinguished between the line of products for industrial use and the retail distribution.
With respect to the first aspect, Henkel, following the acquisition of Loctite, could become market leader in the cyanoacrylate adhesives industry, as well as widen its range of products for industrial use.
Concerning the retail distribution of adhesives for industrial and home use, the Authority deemed that the acquisition of Loctite would lead Henkel to hold by far the largest national market shares. In addition, Henkel would obtain a very wide range of adhesive products (if compared with those supplied by competitors); one of the most famous brands (Superattak), which is present on the retail market of adhesives for home use and joins the brands already distributed by the German group (Pritt, Vinavil and Bostik). Lastly, Henkel would strengthen its trade network.
Further, the Authority decided to re-examined the acquisition by Henkel in 1995 of the operating division dealing with the exclusive distribution of office stationery under the Pelikan brand. In fact at the end of 1995, Henkel and Pelikan formed the joint venture DHP S.p.A., controlled exclusively by Henkel with a 51 percent equity position, while Pelikan held the 49 percent equity position. Such a merger - with respect to which the Authority decided not to start an investigation on January 18th, 1996, given that Henkel and Pelikan distributed products that were not in the same relevant market - was subject to re-examination, considering that the parties involved, when notifying the operation, did not inform that DHP would have also distributed a Henkel rival product, the Vinavil glue.
The proceeding will be concluded within 45 days of the commencing of the investigation.