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German competition authority Bundeskartellamt prohibits Lenzing from acquiring 90% share in Kelheim Hygiene Fibres

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German competition authority Bundeskartellamt prohibits Lenzing from acquiring 90% share in Kelheim Hygiene Fibres

December 03, 2012 - 18:09

BONN, Germany, Nov. 23, 2012 (Press Release) -The Bundeskartellamt has prohibited Lenzing AG, Austria, from acquiring 90% of the shares in Kelheim Hygiene Fibres, Gmbh, Kelheim. Kelheim Hygiene Fibres produces viscose fibres used in the production of tampons and is the major supplier of this product worldwide. Lenzing is its only competitor.

Andreas Mundt, President of the Bundeskartellamt: "The two parties to the merger are the only manufacturers of these special viscose fibres in the world. The planned takeover would have created a monopoly in the market. This would have eliminated competition not only in Germany, but worldwide."

Special viscose fibres are the main material used in the production of tampons. They are bought by the big manufacturers of branded goods and trademarks. Switching production from conventional viscose fibres to the special fibres used in the production of tampons is not economically viable. This would require substantial investment which would be difficult to amortize in the relatively small market. For the same reason the market entry of other companies is unlikely. Cotton fibres are also not regarded as an adequate substitute within the industry. But even if the manufacturers of suitable cotton fibres were taken into consideration, Lenzing and Kelheim Hygiene Fibres would still jointly dominate the market.

The decision is not yet final. The companies have a month to appeal the decision to the Düsseldorf Higher Regional Court.