The European Commission has decided not to approve a plan by three companies to merge their silicon carbide interests as it would give French glassmaker Saint-Gobain a dominant position in Europe.
Th…
The European Commission has decided not to approve a plan by three companies to merge their silicon carbide interests as it would give French glassmaker Saint-Gobain a dominant position in Europe. The European Competition Commissioner Karel Van Miert reportedly agreed with EU competition officials that the deal with Germany“s Wacker-Chemie and Dutch state-owned investment firm NOM, would give Saint-Gobain too strong a position in the 15-nation EU. Under the proposed merger Saint-Gobain hoped to pool its Norwegian and Belgian silicon carbide producers, Norton AS and Intermat SA, with those of Wacker-Chemie, which is partly owned by Hoechst. The Commission began its investigation in August into the deal due to fears that it would harm competition in the production of abrasives and heat-resistant products. Despite this, Saint-Gobain says it has the means to carry on its acquisitions policy without putting profit growth in jeopardy. In an interview on 25 November, its chairman Jean-Louis Beffa, said that with debt at 30% of capital and having already paid off half the Poliet acquisition, the group has the financial means to pursue a dynamic acquisitions strategy. He added that with a FFr 100 billion turnover, “Saint-Gobain is heading towards cashflow of FFr 11-12 billion francs, six to seven billion francs of investment, and four to five billion net profit.” In 1995, the group recorded net profit of FFr 4.2 billion. The company also said that the European Commission“s decision to block the proposed merger would push it to expand that branch“s activities outside Europe.