ACM clears acquisition of gas company Primagaz by rival company Benegas
The Netherlands Authority for Consumers and Markets (ACM) has cleared the acquisition of gas company Primagaz Nederland by rival company Benegas. ACM does not expect the acquisition to lead to any price increases. The gas bottles that Benegas and Primagaz sell to consumers hardly compete with each other.
Benegas offers consumers gas bottles made of synthetic materials (Benegas Light), while Primagaz offers consumers gas bottles made of lightweight steel (EasyBlue). ACM has assessed whether consumers switch between these gas bottles. That turns out not to be the case. Consumers that use synthetic bottles do not exchange their gas bottles for lightweight steel ones (and vice versa). If the prices of either the synthetic or lightweight steel gas bottles go up, consumers are more likely to switch to the traditional steel gas bottles. There are sufficient providers of steel gas bottles that are either currently active or that would face few problems when entering the market. That is why ACM comes to the conclusion that this acquisition will not lead to any anticompetitive problems.
What was this case about?
Benegas and Primagaz supply propane gas to businesses and consumers. In the first phase of the investigation, ACM came to the conclusion that sufficient competition would remain on the market for bulk propane gas. However, ACM did wish to investigate whether sufficient competition would remain for smaller and lighter gas bottles for consumers. That investigation has revealed that no anticompetitive problems are to be expected in that segment. That is why this acquisition can go ahead.
How does ACM assess mergers and acquisitions?
With any merger or acquisition, there is a question of whether sufficient competition will remain on that market after the concentration, and in the future. Competition ensures that products are of high quality, that they are offered on the market at competitive prices, and that innovation is stimulated. That is why ACM decides in advance whether or not companies are allowed to merge or acquire other companies. ACM assesses whether the markets involved will continue to work well for people and businesses, now as well as in the future.