CCI Approves Saudi Arabian Oil Company’s Acquisition of 70% Stake in Saudi Basic Industries Corporation

On September 27, 2019, CCI approved Saudi Arabian Oil Company’s (‘Saudi Aramco’) acquisition of 70% shareholding in Saudi Basic Industries Corporation (‘SABIC’) from Public Investment Fund of Saudi Arabia (“PIF”).[1]

The parties overlapped in the market for thermoplastic polymers, which included: (i) poly butadiene rubber; (ii) ethylene, ethylene propylene diene monomer; (iii) polyethylene (‘PE’) (including its potential sub-segments, i.e. high density PE, low density PE, linear low density PE); (iv) methyl methacrylate, (v) poly methyl methacrylate; and (vi) paraxylene and polypropylene resins. The CCI also assessed the presence of the parties and their competitors in various sub segments. The parties proposed delineation of the relevant geographic market to be worldwide/global, however, the CCI limited it to India. Ultimately, the CCI decided to leave the market open since the proposed transaction was unlikely to raise any competition concerns in India. The combined market shares of the parties in all the overlapping markets were found to be less than or equivalent to 20-25%.

The CCI also noted that while there were no existing vertical relationships, there were potential vertical links between the operations and products of parties. Ultimately, given the presence of other competitors, the CCI concluded that these potential vertical links are unlikely to raise anti-competitive concerns.

[1] Combination Registration No. C-2019/09/683, Order dated September 27, 2019

Published In:Inter Alia Special Edition - Competition Law - January 2020 [ English
Date: January 17, 2020