Approval of combination applied by ICI Taiwan Ltd., Quest International Taiwan Ltd., National Starch & Chemical Ltd., Taiwan
Chinese Taipei
Case:
Approval of combination applied by ICI Taiwan Ltd., Quest International Taiwan Ltd., National Starch & Chemical Ltd., Taiwan
Key words:
combination approval application, share acquisition, adjustment of business structure, chemical products
Reference:
Fair Trade Commission Decision of 1 July 1998 (347th Commission Meeting); Decision (87) Kung Chieh Tzu No. 8700385
Industry:
Chemical Product Manufacturing Industry (2110)
Relevant Laws:
Articles 6(1)(ii), 11, 12 of the Fair Trade Law; Article 8(1) of the Enforcement Rules of the Fair Trade Law
Summary:
In line with adjusting its global business structure, i.e., quitting heavy chemical products and focusing on light chemical products, the ICI group transferred its shares of ICI Far Eastern Co., Ltd. in Chinese Taipei to DuPont Energy (a U.S. company) and had its subsidiary, ICI Taiwan Ltd. acquire shares in Quest International Taiwan Ltd. [QIT] and National Starch and Chemical Ltd. [NSC] in Chinese Taipei, which belonged to the Lien He Li Hua group.
ICI Taiwan Ltd. planned to purchase 99.88% of QIT shares held by Motar and 99.88% of NSC shares held by Mavibel. Accordingly, ICI Taiwan Ltd. would have owned more than one third of the voting shares of both companies, which would constitute a combination in accordance with Article 6(1)(ii) of the Fair Trade Law (FTL). In addition, because the sales volume of ICI Taiwan Ltd. for the preceding fiscal year met the NT$2 billion standard as provided by Article 11 of the FTL, approval of the combination was required. ICI Taiwan Ltd. filed the application with relevant information in accordance with Article 8(1) of the Enforcement Rules of the Fair Trade Law. Accordingly, the application for approval fulfilled the procedural requirements of the FTL.
In regard to the requirement that the benefit of the combination to the overall economy shall outweigh the disadvantages of its restraining competition:
(1) The shares of the specific market held by the participating enterprises will not be increased by this combination to an extent that would exclude market entry: The three participating enterprises in this combination operate different business; therefore, their combination does not involve a horizontal combination of competitors in the same market or a vertical combination. This combination by nature is similar to a combination for the purpose of diversifying the business. It may help ICI Taiwan Ltd. to promote the efficiency of business operation. The participating enterprises' market shares are not directly increased by the acquisition itself, and the market dominance is not increased that would result in greater barriers to the entry of other enterprises.
(2) The number of enterprises in the relevant market will not be decreased due to this combination, leading to less competition: According to the application, the participating enterprises will not change their operating strategy or stop their operations due to the combination. Therefore, the number of enterprises in the relevant market will not be decreased due to this combination, leading to less competition.
In conclusion, although ICI Taiwan Ltd. becomes the new holder of QIT and NSC by acquiring the shares of the two companies from Motar and Mabivel, respectively, ICI Taiwan Ltd. will not change the company' s operating strategy. In addition, the combination will not adversely affect market competition or be a barrier to importation in the relevant markets. Thus, the combination is approved in accordance with Article 12 of the FTL.
Summarized by Chen Ying-ju
Supervised by Li Yen-hsi
Appendix:
ICI Taiwan Ltd.' s Uniform Invoice No.: 89467900
Quest International Taiwan Ltd.' s Uniform Invoice No.:
09494052
National Starch & Chemical Ltd.' s (Taiwan) Uniform Invoice
No.: 97173668