HENKEL/LOCTITE (Conclusion of the investigation)
PRESS RELEASE
The Italian Competition Authority authorized the acquisition by the Henkel group of Loctite Italia, on condition that Henkel would proceed with the commitments formally assumed during the investigation.
The inquiry was initiated to ascertain if the acquisition by Henkel of Loctite Corporation and all the companies controlled by the US group, including Loctite Italia S.p.A. and the controlled Loctite FAS, could create or strengthen a dominant position to reduce competition substantially and on a lasting basis in the national markets of adhesives for industrial and home use.
Concerning the retail distribution of adhesives for professional and home use, the Authority ruled 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 the one supplied by competitors); one of the most famous brands (Superattak), which would join the brands already distributed by the German group (Pritt, Vinavil and Bostik). Lastly, Henkel would strengthen its trade network, in such a way as to behave independently of competitors and distributors, by reinforcing existing barriers to entry against new firms and preventing competitors from market access.
However, Henkel formally assumed certain commitments aimed at eliminating or reducing substantial distortions to competition following the merger. In particular, Henkel undertook:
(1) to cease to distribute adhesives under the Vinavil brand, both directly and by DHP S.p.A.(a joint venture formed by Henkel and Pelikan, and controlled exclusively by Henkel with a 51 percent equity position);
(2) to discard the Usavinil brand (vinilic glue) owned by Loctite;
(3) to sell to a competitor the license for the use of adhesives under the Bostik brand, which are designed for the home use, as well as the application and formulation know-how;
(4) to sell to a competitor the license for the use of adhesives under the Sicomet and Omnifit brands, which are designed for the industrial use, as well as the application and formulation know-how;
(5) to stop selling Nexus (anaerobic adhesive).
Taking into account the proposals made by Henkel, the Authority authorized the acquisition of Loctite Italia and Loctite FAS, on condition that Henkel would carry on the assumed commitments and would not use for a ten-years period Pritt and Superattak brands to market products competing with the licensed ones.