Owens Corning buy of Saint-Gobain's Vetrotex cleared by EU subject to conditions

BRUSSELS (Thomson Financial) - The European Commission said it has cleared Owens Corning Inc's proposed acquisition of Compagnie de Saint-Gobain SA's glass fibre reinforcements and composite fabrics unit, Vetrotex, subject to conditions.

The commission said its decision is conditional upon the divestment of two facilities producing certain types of glass fibre reinforcements for which it had identified competition concerns.

In light of this commitment, the commission said it has concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Competition Commissioner Neelie Kroes said in a statement: 'In view of the remedies offered, I am satisfied that effective competition will be safeguarded and that European customers of glass fibre reinforcements will not be harmed by this transaction.'

The commission said its market investigation revealed that the proposed operation, as initially notified, would raise competition concerns in Europe on the markets for direct rovings and dry use chopped strands, where the merger would create a market leader significantly stronger than the largest competitors, and also on the continuous filament mat market, where the transaction could lead to the creation of a monopoly.

It added that, with a view to removing these concerns, the parties offered to divest two of Owens Corning's glass fibre reinforcements plants located in Battice, Belgium and in Birkeland, Norway. As a result of these divestitures, the overlap created by the proposed transaction will be removed on the markets where competition concerns had been raised.

Following a market test of the proposed commitments, the commission said it concluded that the commitments would be suitable to remove its competition concerns. [e-mail] pam/jrr COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.