The commission confirmed that the proposed acquisition by AkzoNobel N.V. of Metlac Holding S.r.l. would result in a substantial lessening of competition (SLC) in the supply of metal packaging coatings for beer and beverage cans in the UK.
However, they did reverse initial findings in relation to the market for supply of coatings for food, caps and closures and general line metal packaging, finding that the merger would not result in a SLC.
This was a departure from its provisional finding, following more detailed analysis of competition in this market in the UK, said the commission.
Prevent call option
It said the only remedy likely to be effective in addressing the SLC is prohibition of the transaction, which includes preventing AkzoNobel from completing the exercise of its call option.
The firm exercised a pre-existing contract clause to buy the remaining stake in Metlac in January 2012 and assume sole control of the company.
AkzoNobel has an existing stake of 49% in Metlac Holding through its subsidiary Akzo Nobel Coatings International B.V. (ANCI) as well as owning 44% of a Metlac subsidiary.
AkzoNobel and Metlac are two of the four main suppliers of metal packaging coatings for segments including food and beverage cans in the European Economic Area (EEA).
An investigation found between them the firms supply 40% to 55% of metal packaging coatings for beer and beverage metal packaging in the EEA and 35% to 50% of metal packaging coatings for food, caps and closures and general line metal packaging in the EEA.
The commission preliminary ruled against the deal in September, and delayed the original report by eight weeks in October, the merger was originally referred by The Office of Fair Trading (OFT) on 23 May.
The verdict was delayed because of the complexity of the inquiry, the need to take account of comments received and to provide a fully reasoned decisions, said the commission.
Previous evidence had shown Metlac is considered by customers to be especially price competitive and that it represents a significant competitive constraint to AkzoNobel.
The acquisition has already been approved in Germany, Austria, Cyprus, Russia, Brazil and Pakistan.