Europe’s two largest makers of PVC Ineos Group and Solvay have received approval from the European Union for a EUR4.3 billion joint venture of their PVC units after agreeing to sell their plants (http://www.plasticsandrubberasia.com/mar2014/company7.html)

Ineos will seek a buyer for sites producing suspension PVC and related assets, giving the purchaser what will be a “self-standing S-PVC business capable of competing with the new joint venture.” Ineos and Solvay will not be able to close their deal until they have a binding agreement with a purchaser approved by EU regulators, according to the European commission said.

The deal, which was announced last year, will allow the companies to reduce costs ranging from transport to marketing and raise profitability against the backdrop of inflated raw material and energy costs being faced by the European industry. The PVC market is also facing overcapacity and weak demand in Europe. “PVC is an important raw material used in the construction sector and in many other industries,” said EU Competition Commissioner Joaquin Almunia. “The proposed commitments will ensure that the transaction will not result in higher prices to the detriment of businesses and consumers in Europe.”

Ineos and Solvay will continue to run their businesses separately until the transaction is completed in the fourth quarter of this year. Solvay has also said it plans to exit the PVC venture at a later stage.