Colombia: Competition Office objects to M&A deal of two Colombian chemical companies

Word M AND A made with wood building blocks,stock image

An M&A between QUIMPAC and MEXICHEM was objected to by the Colombian Competition Office on 12 March 2019. The operation involves the acquisition of 100% of MEXICHEM by QUIMPAC.

The government determined that both companies participate similarly in the Colombian chemical industry in different production and marketing stages in the chloralkali process.

The M&A puts at risk free competition due to (1) behavior affecting purchasing power by potential buyers of chemical products offered by the two companies involved; (2) existence of entrance barriers in potential markets; (3) high bar for new agents and potential competitors; (4) slow reaction by customers and competitors facing restrictive business practices that may be adopted by the new company; and (5) the exclusion of potential competitors.