THE COMPETITION COUNCIL,

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1 DECISION no.244 / regarding the economic concentration that it is intended to be achieved by First Chemical Holding Vagyonkezelő Korlátolt Felelősségű Társaság (Hungary) through acquisition of sole direct control over BorsodChem Nyilvánosan Működő Részvénytársaság (Hungary) File no. RS-119/ THE COMPETITION COUNCIL, On the grounds of: 1. Decree no.57/ regarding the appointment of the COMPETITION COUNCIL members; 2. Decree no.1089/ regarding the appointment of one vice-president of the COMPETITION COUNCIL; 3. Decree no.1087/ regarding the appointment of one member of the Plenum of the COMPETITION COUNCIL; 4. The Competition Law no.21/1996, republished; 5. The Regulation for the COMPETITION COUNCIL organisation, operation and procedures, as subsequently amended and completed; 6. The Regulation regarding the authorisation of economic concentrations; 7. The Guidelines regarding the relevant market definition with a view to establish a substantial share on the market; 8. The Guidelines regarding the turnover calculation in cases of anticompetitive practices provided at Art.5 align.1 of the Competition Law no.21/1996 and in the cases of economic concentration; 9. The Guidelines regarding the application of the provisions of Art.33 of the Competition Law no.21/1996, regarding calculation of the authorisation fee for the economic concentrations; 10. The Notification registered with the COMPETITION COUNCIL under no RS- 119/ ; 11. The Note from the Industry and Energy Directorate regarding the analysis of the notification registered with the COMPETITION COUNCIL under no.rs- 119/ Having in view the following: 1. The economic concentration is intended to be achieved by First Chemical Holding Vagyonkezelő Korlátolt Felelősségű Társaság from Hungary (hereinafter referred to as First Chemical Holding Kft ), in accordance with Art.10 align.2 let.b of the Competition Law no.21/1996, republished, through the acquisition of the sole direct control over BorsodChem Nyilvánosan Működő Részvénytársaság from Hungary (hereinafter referred to as BorsodChem Nyrt ). 1

2 2. The notified operation is intended to be achieved by way of public offer for the whole of the issued share capital of BorsodChem Nyrt. The public offer is governed by the laws of the Republic of Hungary and it was launched on , after its approval by the Hungarian Financial Supervisory Authority. The last day of the acceptance period of the offer is expected to be on or before In case in which First Chemical Holding Kft does not acquire shares exceeding 50% of the share capital of BorsodChem Nyrt, First Chemical Holding Kft has the right to rescind the share purchase agreement concluded with each shareholder (pursuant to the Hungarian Capital Markets Act). 3. The turnover related to the notified economic concentration exceeds the thresholds provided at Art.14 of the Competition Law no.21/1996, republished. Therefore, according to Art.15 align.1 of the Competition Law no.21/1996, this operation is subject to control and must be notified to the COMPETITION COUNCIL. 4. First Chemical Holding Kft has submitted to COMPETITION COUNCIL the notification form registered with no.rs-119/ Notification has become effective on The acquiring company, First Chemical Holding Kft is a special purpose vehicle and has been established for the purpose of this transaction. First Chemical Holding Kft has not carried out any activity before this transaction. First Chemical Holding Kft is indirectly controlled by Permira Europe IV Fund, which is ultimately controlled by Permira Holding Limited. Permira Holding Limited is a European private equity fond. 6. Except Permira Europe IV Fund, Permira Holding Limited also controls Permira Europe II Fund and Permira Europe III Fund. 7. Permira Europe II Fund jointly controls with Goldman Sachs Group Inc. (a third party undertaking beside Permira Holding Limited) the company Cognis Gmbh. Cognis Gmbh controls a number of companies active in the field of specialty chemicals, being active in the production, marketing and distribution of a wide range of chemical products including in the food, cosmetics, personal care, home care, lubricants, coatings, packaging, mining, agrochemicals, leather and textiles industries. 8. Cognis Gmbh, through Cognis Oleochemiclas Malaysia, is the only company in which Permira Holding Limited has in interest who is active on the markets related to those on which is active BorsodChem Nyrt, the intended acquired company. 2

3 9. Cognis Oleochemicals Malaysia is a jointly controlled company by Cognis Gmbg and Golden Hope Plantations Berhad (a third party company beside Permira Holding Limited). Cognis Oleochemicals Malaysia produces a wide range of applied chemistry products, including additives for plastics, like polyvinyl chloride (PVC). These include PVC additives such as plasticizers, plastifiants, antistatics, lubricants which are added in order to modify the qualities of plastics. Also, Cognis Oleochemicals Malaysia produces speclaised polyols, which are combined with methylene diphenyl diisocyanate (MDI) and toluene diisocyanate (TDI) to produce polyurethanes. 10. The company that is intended to be acquired, BorsodChem Nyrt, has the following main shareholders: VCP Divestment AG, Firthlion Limited, HSBC Bank, FTIF Templeton Eastern E. Fund. BorsodChem Nyrt, together with the companies controlled by it (hereinafter referred to as BorsodChem Group ) is a vertically integrated producer of polyvinyl chloride (PVC), toluene diisocyanate (TDI) and methylene diphenyl diisocyanate (MDI), chemicals used in the manufacture of polyurethane plastics. BorsodChem Group also has a number of auxiliary activities such as power generation, construction and maintenance services. These support its main manufacturing activities and small amounts of these auxiliary services are also provided to parties outside of the Group. 11. In 2005, the BorsodChem Group has sold in Romania the following substances: TDI (toluene diisocyanate), MDI (methylene diphenyl diisocyanate), caustic soda, hydrochloric acid, CPE (chlorinated polyethylene), PVC resins, PVC compounds, PVC end-products (rigid films, stretch films, PVC sheets and window profiles). In 2004 and 2005, Cognis Gmbh has sold in Romania small quantities of PVC additives (only lubricants). 12. The relevant markets related to the economic concentration has been defined as follows: TDI (toluene diisocyanate) market, MDI (methylene diphenyl diisocyanate) market, caustic soda market, hydrochloric acid market; CPE (chlorinated polyethylene) market, PVC resins market, PVC compounds market, PVC rigid and stretch films market, PVC sheets market, PVC window profiles market, on the whole Romanian territory. 3

4 13. The vertically related markets involved in the notified economic concentration are the PVC additives market in the form of lubricants (product of Cognis Oleochemicals Malaysia), situated downstream to the PVC compounds and PVC end-products markets (manufactured by BorsodChem Group), as well as the polyols market (manufactured by Cognis Oleochemicals Malaysia), situated downstream to the MDI market (manufactured by BorsodChem Group). 14. In the year 2005, the BorsodChem Group has acquired a small quantity of lubricants manufactured by Cognis Oleochemicals Malaysia. Cognis GmbH trades a product containing very small quantities of MDI, however, such products are not acquired from the BorsodChem Group. 15. The main competitors of the BorsodChem Group on the defined relevant markets and the market shares held by this Group in 2005, according to the notifying party s estimates, were as follows: on the TDI market (toluene diisocyanate), the BorsodChem Group held a market share of approximately [ ]%; on the MDI market (methylene diphenyl diisocyanate), the BorsodChem Group held a market share of approximately [ ]%; on the caustic soda market, the BorsodChem Group held a market share of approximately [ ]%; main competitors were SC Oltchim SA and SC Chimcomplex SA; on the CPE market (chlorinated polyethylene), the BorsodChem Group held a market share of approximately [ ]%; main competitor was DOW; on the PVC resins market, the BorsodChem Group held a market share under [ ]%; main competitors was SC Oltchim SA; on the PVC compounds market, the BorsodChem Group held a market share under [ ]%; main competitors were SC Oltchim SA, SC Teraplast SA, SC Cardinal SRL, SC Prodplast SA; on the PVC rigid and stretch films market, the BorsodChem Group held a market share of approximately [ ]%; on the PVC sheets market, the BorsodChem Group held a market share of approximately [ ]%; main competitors were Kömmerling, Veka, Brett Martin, Röchling; on the PVC window profiles market, the BorsodChem Group held a market share of approximately [ ]%; main competitors were Gealan, Aluplast, Rehau Polymer, Veka, SC Toptherm SA, SC Teraplast SA, SC Ramplast SA. 16. During 2004 and 2005, Cognis GmbH has traded in Romania very small quantities of PVC additives (only lubricants), holding a market share below [ ]%. 17. Neither First Chemical Holding Kft nor any other controlled subsidiaries of Permira Holding Limited are present on the defined relevant markets. Consequently, it could be deemed that the market segments held by 4

5 BorsodChem Group shall remain as previously to the economic concentration operation. 18. By way of the acquisition of control by First Chemical Holding Kft over BorsodChem Nyrt certain activities of the two groups shall be vertically integrated. Cognis Oleochemicals Malaysia, jointly controlled by Cognis GmbH and Golden Hope Plantations Berhard, is producing lubricants (a PVC additive), product situated downstream of the BorsodChem Group s PVC compounds and PVC end-products. Likewise, Cognis Oleochemicals Malaysia produces very small quantities of polyols, which contain MDI, thus operating downstream of BorsodChem Group s MDI market. 19. Considering that there are no horizontal relationships between the undertakings concerned by the economic concentration, but just vertical ones, and their combined market shares on the relevant market is below 25%, it results that the proposed economic concentration operation shall not have any impact on any of the relevant markets. 20. The analyzing of the economic concentration has illustrated the fact that the notified operation does not have as effect the creation or consolidation of a dominant position, which leads or may lead to the restraint or distortion of the competition on the Romanian market or a part of such. DECIDES Art.1. It hereby issues the present non-objection decision regarding the economic concentration envisaged to be realized, in the conditions of Art.10 align.2 let.b of the Competition Law no.21/1996, republished, by First Chemical Holding Vagyonkezelő Korlátolt Felelősségű Társaság from Hungary by acquiring sole direct control over BorsodChem Nyilvánosan Működő Részvénytársaság from Hungary, in accordance with the provisions of Art.46 align.1 let.b of the Competition Law no.21/1996, republished, being ascertained that, although the notified operation falls under the scope of the law, there are no serious doubts regarding its compatibility with a normal competition environment. Art.2. The authorization fee, stipulated at Art.32 of the Competition Law no.21/1996, republished, is of RON [ ] and shall be paid by the acquirer, First Chemical Holding Vagyonkezelő Korlátolt Felelősségű Társaság from Hungary in maximum 30 days as of the date of communication of the present Decision, with payment order treasury type, at the State budget, mentioning Taxes and tariffs for the issuance of licenses and functioning authorizations. A copy of such payment order shall be transmitted to the Competition Council without delay. 5

6 Art.3. The present decision becomes applicable at the date of its communication to the parties. Art.4. The COMPETITION COUNCIL S Decision can be challenged, according to the provisions of Art.47 align.4 of the Competition Law no.21/1996, republished, in 30 days as of communication date, before the Bucharest Court of Appeal, Administrative and Fiscal Litigation Department. Art.5. In accordance with the provisions of Art.57 align.1 of the Competition Law no.21/1996, republished, the present Decision shall be published on the COMPETITION COUNCIL S website. Art.6. The Industry and Energy Directorate and the General Secretary shall follow-up the fulfillment of the present Decision. Art.7. The present Decision shall be communicated without delay, by the COMPETITION COUNICL S General Secretary, to: THE ACQUIRING COMPANY: FIRST CHEMICAL HOLDING VAGYONKEZELŐ KORLÁTOLT FELELŐSSÉGŰ TÁRSASÁG Contact address: First Chemical Holdings Kft, c/o Permira AdvisersLLP, 20 Southampton Street, London, WC2E7QH Tel: Fax By attorney-in-fact, [ ] Mihai Berinde President 6

File no. RS-59/

File no. RS-59/ DECISION no. 05 / 25.01.2010 on the analysis of economic concentration achieved by SC OLTCHIM SA Ramnicu-Valcea, by acquiring direct sole control over the assets relating to activities of petrochemical