The Commission for the Protection of Competition (hereinafter the “Commission”) at its meeting held on 22/06/2018, examined the notification of a concentration concerning the creation by the companies Petrolina (Holdings) Public Ltd, SYNERGKAZ Ltd and Intergaz Ltd (hereinafter the "Companies"), of the company VLPG PLANT LTD (hereinafter the "New Company"). Based on the information in the notification, the Companies will transfer part of their activities regarding the storage and handling of liquefied petroleum gas and relating activities such as the bottling and maintenance of liquefied petroleum gas bottles and its loading to tankers within the Republic of Cyprus, to the New Company.
The Commission at its meeting, after taking into consideration the written report of its Service found that, the above notified concentration falls within the provisions of the Control of Concentrations between Undertakings Law of 2014, Law no. 83(I)/2014 (hereafter the «Law»), and raises serious doubts as to its compatibility with the functioning of competition in the market.
The Commission, after taking into account all the relevant information that constitutes the proposed concentration, unanimously decided that the concentration raises doubts as to its compatibility with the functioning of competition in the storage and handling of liquefied petroleum gas (in bulk and in bottles) market in which the New Company will operate, and the import, wholesale and retail sale of liquefied petroleum gas (in bulk and in bottles) markets in which the Companies operate. Specifically:
· The notified concentration might significantly impede competition in relation to the horizontally affected market for storage and handling of liquefied petroleum gas, since the New Company will hold a dominant position in that market and may have the ability and motive to exploit this position for example by having high prices for the rent of storage facilities and for access to the anchorage and unloading pipes, dissimilar conditions for equivalent transactions between its shareholders and third parties - besides prices, exclusivity agreements etc. Therefore, the New Company will have the means and opportunity to hinder the expansion of the activities of other companies or potential competitors, resulting in the possible obstruction of competition as a result of the creation of its dominant position.
· The notified concentration might lead to the coordination of the companies active in the relevant market of storage and handling of liquefied petroleum gas due to the horizontal overlap of activities with Hellenic Petroleum Cyprus Ltd, a possible new entrant in the market. Therefore, the possibility of new companies entering the market should be examined.
· Through the joint storage and handling of liquefied petroleum gas of the Companies, the notified concentration may facilitate them to agree on the terms of their coordination either in the upstream affected market, namely the import market for liquefied petroleum gas, and/or in the downstream affected market, namely the wholesale and retail sale of liquefied petroleum gas and/or to exclude potential competitors, since the Board of Directors of the New Company may consist of Directors who are also Directors of the Companies.
· The Companies may gain access to commercially sensitive information regarding the activities of potential competitors in the up-stream or down-stream market. When potential competitors in the import of liquefied petroleum gas and / or wholesale and / or retail sale applies to the New Company for storage and handling of liquefied petroleum gas, the New Company Directors, who may be the same as the Directors of the Companies, may obtain sensitive information about the activities of their competitors, thereby putting them at a competitive disadvantage, and making entry or expansion in the market for liquefied petroleum precarious.
The Commission on the basis of all the relevant information before it, concluded unanimously that there is a need to proceed to an in-depth investigation of the notified concentration, according to the provisions of the Law.
It is noted that according to Section 26 of the Law, in the case of a concentration for which a full investigation is carried out and following an application by persons who may be affected directly by the decision of the Commission but who do not participate in the concentration, these persons are granted the opportunity to submit their views regarding the concentration in such a manner and at such time as not to violate the time limit set in Section 27.
This announcement is based on the provisions of Section 22 (3) of the Law.
COMMISSION FOR THE PROTECTION OF COMPETITION