ACCC to not oppose Denka/Mitsui’s proposed acquisition of DuPont’s chloroprene rubber business

23 March 2015

The Australian Competition and Consumer Commission has announced that it will not oppose Denka Performance Elastomer LLC’s proposed acquisition of E. I. du Pont de Nemours and Company (DuPont)’s chloroprene rubber business. Denka Performance Elastomer LLC is a new joint venture owned 70% by Denki Kagaku Kogyo Kabushiki Kaisha (Denka) and 30% by Mitsui & Co., Ltd (Mitsui).

“DuPont and Denka are currently two of the more important suppliers of chloroprene rubber to Australian customers, with Denka in particular having a large proportion of Australian sales,” ACCC Chairman Rod Sims said.

“The ACCC took into consideration concerns expressed by some customers about the loss of competition between these companies. However, the ACCC considered that following the proposed acquisition, Denka would continue to face competition from at least three other established global suppliers of chloroprene rubber. These other manufacturers do not face significant barriers to increasing supply to Australian customers.”

“No chloroprene rubber is manufactured in Australia and the product is relatively simple to import, so the global competitive dynamic was important to our assessment,” Mr Sims said.

“Australian demand comprises less than 1% of the total world demand. Furthermore, the ACCC understands that some larger Australian customers have the option to purchase chloroprene rubber at prices negotiated on a global basis by their international affiliates. This provides a further level of protection against local price increases for those customers.”

A number of overseas competition agencies are considering or have considered the acquisition. So far, the relevant agencies in the United States, Germany, Taiwan and Ukraine have cleared the transaction. The transaction is still being reviewed in a number of other jurisdictions.

Chloroprene rubber is a type of synthetic rubber. It is used in the production of technical rubber parts (e.g. cables, hoses, industrial and mining conveyor belts and automotive components), adhesive manufacture, as a load bearing base in construction projects, and in other products such as wetsuits and gloves.

Denka is headquartered in Tokyo, Japan. It manufactures and distributes a wide range of chemical products. Denka produces chloroprene rubber under the brand name “Chloroprene” from its plant in Omi, Japan.

DuPont is headquartered in Delaware, USA. It is a science, technology, and engineering company, which develops products, materials, and services in a wide range of sectors. DuPont produces chloroprene rubber under the brand name “Neoprene” from its plant in Louisiana, USA.

Mitsui is headquartered in Tokyo, Japan. It is a global trading, investment and services enterprise, operating in a range of industries. Mitsui does not produce chloroprene rubber, but distributes Denka’s chloroprene rubber worldwide. Mitsui is also a distributor of DuPont products which are unrelated to chloroprene rubber.

See also: Denki Kagaku Kogyo Kabushiki Kaisha and Mitsui & Co Ltd - proposed acquisition of chloroprene rubber business of E.I. du Pont de Nemours and Company

Release number: 
MR 37/15
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