Brussels, 13 March 2023
The European Commission has approved unconditionally, under the EU Merger Regulation, the acquisition of the nitrogen business of Borealis AG (‘Borealis NITRO‘) by AGROFERT Group (‘AGROFERT’). The Commission concluded that the transaction would raise no competition concerns in the European Economic Area (‘EEA’).
Borealis AG and AGROFERT are both active in the agricultural and chemical sectors. They compete in the production and sale of nitrogen fertilizers, AdBlue liquid and other technical nitrogen products.
The Commission’s investigation
Based on its market investigation, the Commission found that the transaction would not significantly reduce competition in markets for: (i) nitrogen fertilisers; (ii) AdBlue non-toxic liquid used as exhaust fluid for diesel engines and (iii) technical nitrogen products such as aqueous ammonia and weak nitric acid. The Commission also found that the transaction would not raise concerns in relation to the distribution of nitrogen fertilisers in Czechia and Slovakia.
During its investigation, the Commission examined:
- The horizontal overlap between the companies’ activities in the nitrogen fertiliser market, in particular in the production and sale of calcium ammonium nitrate fertilisers. The Commission found that the market is wider than the territory of Member States, as customers source these products from all over the EEA, and that various types of nitrogen fertilisers are substitutable. Moreover, the merged entity would continue to face several strong competitors and it would only have moderate combined market shares. In addition, the merged entity would be constrained by imports from outside the EEA.
- The vertical links between Borealis NITRO as a supplier of nitrogen fertilisers and AGROFERT as a retailer of these products in Czechia and Slovakia. The Commission found that following the transaction numerous suppliers of nitrogen fertilisers will remain active in the EEA. Moreover, the parties are not significantly large customers of third-party fertilisers, and sufficient number of competing distributors will continue to operate in Czechia and Slovakia.
- The horizontal overlap between the companies’ activities in the market for AdBlue and the markets for technical nitrogen products. The Commission’s investigation found that in all those markets the merged entity would still face strong competition from other competitors.
The Commission therefore concluded that the transaction would raise no competition concerns in the EEA and cleared the case unconditionally.
Companies and products
AGROFERT, headquartered in Czechia, is a company active in the production and sale of nitrogen fertilisers, AdBlue and various technical nitrogen products. It also distributes nitrogen fertilisers in Czechia, Hungary and Slovakia, to a lesser extent, in Croatia, Poland and Romania.
Borealis AG, headquartered in Austria, is a chemical company. Borealis NITRO encompasses all nitrogen activities of Borealis AG and is active in the production and sale of nitrogen fertilizers, AdBlue, technical nitrogen products and melamine.
Merger control and procedures
The transaction was notified to the Commission on 6 February 2023.
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
More information is available on the Commission’s competition website, in the public case register under the case number M.10834.