The European Commission has cleared BP’s plans to create a biofuels joint venture company with Associated British Fuels called Vivergo.
The parties plan to build a $400 million world-scale bioethanol plant at the site of BP’s existing chemicals facility at Saltend, Hull, in the UK. The European Commission (EC) approved the proposal under the EU merger regulation as it said that, given the limited overlap of the parties’ activities, the joint venture is not likely to affect competition in the European Economic Area.
The EC’s examination of the proposal showed that the horizontal overlaps between the relevant activities of the parent companies and the joint venture are minimal and limited to the markets for the production and supply of bioethanol and production of non-grain food ingredients, a by-product of bioethanol. The EC added: „the parties’ shares on all relevant markets are below a level indicating market power and the additional market share that results from this transaction is very small.”
BP and Associated British Foods, along with a third company, DuPont, first announced the proposed collaboration in June 2007, stating that the plant is expected to be commissioned in late 2009 and will have an annual production capacity of some 420 million liters from wheat feedstock. (energy-business-review)