AdC clears acquisition of Ferro Corporation by Pigments Spain, subject to divestment commitments

Press Release 23/2020
AdC clears acquisition of Ferro Corporation by Pigments Spain, subject to divestment commitments
The AdC – Portuguese Competition Authority has decided to clear the proposed acquisition of Ferro Corporation (Ferro), subject to commitments by the acquiring undertaking, Pigments Spain, SL. The AdC had expressed concerns that the transaction, as originally notified, would have had a detrimental effect on competition.
Such concerns led to an in-depth analysis (or Phase II) of the merger. In order to prevent a negative impact on competition, the acquiring company committed to divesting assets acquired to Ferro, in Portugal.
The AdC’s initial market investigation indicated that the proposed merger could raise serious competition concerns, in particular because the merged entity's behaviour may have the ability and incentive to deteriorate the offer conditions. These includeprice, quality or variety, thus creating significant barriers to competition in the supply of enamels, enamelled paints and digital paints - essential inputs to the ceramic floor and tile industry.
The merger was initially notified on June 12, 2020. The AdC adopted on October 14, 2020 an in-depth investigation into the acquisition of sole control by Pigments Spain, of a set of assets in the business of coatings for the ceramic industry owned by Ferro Corporation, as it considered that the proposed merger would result in significant barriers to competition.
The commitments now presented by Pigments, when including the sale to the benefit of a third party of the assets acquired from Ferro Corporation in Portugal, contribute to keeping an offer structure similar to the current one. Consequently, such commitments were considered sufficient, proportionate and adequate, in order to solve the competition concerns identified by the AdC.
Pigments Spain is a Spanish company owned by the Esmalglass-Itaca-Fritta (EIF) group. The latter is mainly dedicated to ceramic coating. In Portugal, EIF is present through an afilliate, Esmalglass Portugal, a company providing customer support services for the ceramic industry.
The Ferro Assets are a set of companies which develop, produce and sell ceramic tile coverings and are located in Europe, Africa, Asia and the Americas. In Portugal, the target business includes assets belonging to the group's national subsidiary, Ferro - Indústrias Químicas, Lda.

December 28, 2020