Mergers: EU Commission clears the acquisition of sole control over SABIC by Saudi Aramco

The European Commission has approved, under the EU Merger Regulation, the acquisition of sole control over Saudi Basic Industries Corporation (“SABIC”) by the Saudi Arabian Oil Company (“Saudi Aramco”), both of Saudi Arabia.

SABIC is primarily active downstream from crude oil in the production and sale of commodity chemicals, intermediates, polymers, fertilisers and metals. Saudi Aramco is primarily active in the upstream petroleum value chain, namely in the exploration, production, and marketing of crude oil, natural gas, LPG and fuels. The Commission concluded that the proposed acquisition would raise no horizontal competition concerns given the companies’ moderate combined market shares in relation to the various petrochemical products they supply, and the fact that a sufficient number of credible suppliers will remain active in the relevant markets.

Moreover, the Commission did not find any anti-competitive vertical effects resulting from the combination of these businesses. The transaction was examined under the normal merger review procedure.