Competition Commission has given its approval for European firms, INEOS Group Investments and Solvay, to set up an equal joint venture for their chlorvinyls business.
In an order released today, the Competition Commission of India (CCI) has cleared the proposed deal saying that "it is not likely to have an appreciable adverse effect on competition in India".
As per the proposed deal Solvay and INEOS through a series of inter-related steps will transfer their chlorvinyls and related businesses in the European Economic Area into a 50:50 joint venture entity named SPVC NewCo.
After the proposed combination takes effect, SPVC would be engaged in the business of polyvinyl chloride (PVC) -- widely used in plastic industry -- among others.
INEOS is a global manufacturer of petrochemicals, speciality chemicals and oil products, while Solvay is a global maker of chemicals and plastics.
As per the order, no subsidiaries of Solvay and INEOS, operating in India, will be contributing to the joint venture. Besides, none the subsidiaries in the country are engaged in any activity related to the chlorvinyls and related products.
"...Currently the sales of Solvay and INEOS of the chlorvinyls and related products to India, is through exports only, as neither Solvay nor INEOS, has been engaged in the production of chlorvinyls and related products in India," CCI said in the order.
Among others, the fair trade regulator also observed that "with the presence and contribution of the major domestic producers of PVC in India, the joint venture would have a market share of only around seven per cent, entirely on the basis of volume of PVC exported to India by Solvay and INEOS".
"As regards the rest of the chlorvinyls related products other than PVC, which are exported by Solvay and INEOS to India, it has been stated in the notice that there are no overlaps of any nature between these products," CCI noted.
The deal was entered between INEOS and Solvay on December 5, last year.
