Mergers: Commission approves proposed creation of biobutanol production

Publication date: 09 July 2009

The European Commission has cleared under the EU Merger Regulation the proposed creation of a joint venture between BP Biofuels North America LLC and E.I. du Pont de Nemours and Company (DuPont), also of the US. The joint venture would be active in the development and commercialisation of production technologies for biobutanol, a fuel component produced from biomass. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

BP Biofuels is a wholly owned subsidiary of BP plc., one of the world’s largest energy companies. BP's main businesses are the exploration, development and production of oil and gas, the refining, manufacturing and marketing of oil products and petrochemicals, the transportation and marketing of natural; gas and a growing business in renewable, low-carbon and alternative energies. DuPont is a multinational diversified science company engaged in the research, development, production, distribution and sale of a wide variety of products including chemical products, plastics, agro-chemicals, paints and seeds.

The joint venture would develop and commercialise technologies to enable the production of biobutanol. Its operations would mainly take place in the US. Biobutanol is produced through the fermentation of biomass. Its main use is as a component in fuels. The joint venture aims to also produce and distribute biobutanol to a very limited extent

The Commission found that the proposed transaction would not give rise to horizontal overlaps between the activities of the parent companies as they are currently not active in the licensing of any production technologies for butanol or in the supply of butanol.

The Commission's investigation also ruled out any competition concerns due to vertical relationships given BP's limited position on the downstream markets of gasoline supply, both at EU and national levels.

More information on the case will be available at:

http://ec.europa.eu/competition/mergers/cases/index/m111.html#m_5550

Source: Europa Press Room