韩国公平交易委员会有条件批准乐天化学与HD Hyundai Chemical大山石化整合

The Fair Trade Commission (FTC) said on the 20th that it had conditionally approved a merger between Lotte Chemical and HD Hyundai Chemical. While acknowledging the need for restructuring in the petrochemical industry, the commission judged that the merger could weaken competition in some petrochemical markets and attached conditions including limits on price increases and requirements to maintain supply over the next five years.
Under the deal, HD Hyundai Chemical will absorb Lotte Chemical's Daesan petrochemical operations, with Lotte Chemical and HD Hyundai Oilbank each holding a 50% stake in the combined HD Hyundai Chemical entity. The two companies' petrochemical production facilities in the Daesan Industrial Complex will also be operated jointly. To assess the deal, the FTC began a preliminary review last November, analyzing market conditions for 20 petrochemical products and gathering input from stakeholders.
The FTC's concerns centered on the markets for LDPE, or low-density polyethylene, and EVA, or ethylene vinyl acetate. LDPE is used in wire insulation, paper cup coatings and food containers, while EVA is used in shoe soles and yoga mats. The merger would reduce the number of major suppliers in these markets from four to three. After the combination, the three companies' combined market share by sales volume would reach 82% for LDPE and 95% for EVA.
The FTC found that fewer suppliers after the merger could make it easier for companies to gauge one another's prices and output, potentially weakening price competition. In the past, the domestic LDPE market saw a prolonged case of price collusion. The commission focused in particular on HD Hyundai Chemical's role as a new entrant that had promoted competition since fully entering LDPE and EVA production in late 2021. HD Hyundai Chemical was found to have supplied products at prices roughly 10% below those of competitors.
Another concern was the halting of low-margin products. If unprofitable products are dropped after the integration, the range of available products could shrink and prices could rise. Most buyers of LDPE and EVA are small and mid-sized plastics processors, many of which need products meeting specific standards, making it difficult to switch to other suppliers.
The FTC therefore allowed the merger but decided to cap fluctuations in domestic LDPE and EVA prices against changes in export prices for five years. It also required that products currently in production continue to be supplied if domestic buyers request them, and moved to restrict the sharing of competitively sensitive information such as prices, quantities, costs and inventories between the two companies and their affiliates. The commission also banned concurrent executive appointments, and required that some executives and employees returning to Lotte Chemical be excluded from LDPE- and EVA-related work for one year.
The FTC concluded that while the merger raised concerns about restricting competition, they were not serious enough to block the deal itself. It determined that the concerns could be resolved by imposing conditions on pricing and supply. The corrective measures may be extended if competition concerns persist after five years. An FTC official said, "Starting with this merger, we plan to closely examine the effects on market competition of subsequent petrochemical restructuring, such as the first deal in Yeosu."