EU's Commission prohibited the acquisition of Austrian group Lenzing by CVC Capital Partners. CVC already owns 64% of Acordis, the former fiber department of Akzo which was merged with UK's Courtaulds in 1998.
By merging Acordis with Lenzing, CVC would have created a world giant on the viscose market. The new group, already called NewCo by CVC, would have been world's fifth largest fiber maker with between €1.4 billion and €1.6 billion in revenues and 7,500 employees worldwide.
According to EU's Commission, "the concentration would have led to very serious competition concerns in the production of viscose staple fibres, where Lenzing is the leading supplier in the European Economic Area," it said in a statement.
Monopoly on the lyocell market
On the lyocell market, a monopoly would have been formed, since Acordis and Lenzing are the sole producers of the new fiber.
In addition, viscose and lyocell are non-substitutable and may not be easily replaced by other similar products, EU's Commission explained.
EU's imports of viscose products are also very low, "considerably below 10%," and customers will not find easy to shift to other suppliers.
Only three small EU's producers would have remained, NewCo excepted : Sniace of Spain, Svenska Rayon of Sweden and Säteri of Finland.
CVC proposed to share the lyocell technology with other producers, but the Commission rejected this offer.
Lenzing's former owner was Bank Austria, which will transfer ownership to its subsidiary, the B&C Holding Gmbh, before finding new candidates. There will be no hurry in again selling Lenzing, the bank already warned.
An Austrian investor, Hannes Androsh, had offered to take over Lenzing, but its proposal of 80 per share was below CVC's one of €90 per share.
October 18, 2001