The proposed acquisition of a controlling stake in Compañía Española de Petróleos S.A (CEPSA), a Spanish integrated oil and energy company, by International Petroleum Investment Company (IPIC) of Abu Dhabi has been cleared by the European Commission.

The European Commission has cleared the operation under the EU Merger Regulation. The Commission concluded that the merged entity would face effective competitors and that the transaction would have no effect on the merged entities' incentives to coordinate their behaviour. The transaction was notified to the Commission on 26 June 2011.

CEPSA is an integrated oil and energy company active in the upstream and downstream oil and gas sectors. Its downstream business focuses on the refining and marketing of petroleum products, such as motor fuels and petrochemical products. With regard to IPIC, it is an investment company with a mandate to invest globally in energy and energy related assets.

The Commission's investigation revealed that IPIC's and CEPSA's combined market shares are moderate and that a number of credible competitors will remain active in the markets for phenol and acetone. The Commission's examination showed that the proposed transaction gives rise to horizontal overlaps in the markets for phenol and acetone. Phenol is used for producing bisphenol-A, phenolic resin, caprolactam, and slimicide. Acetone is used in the production of polycarbonate from bisphenol-A, methyl methacrylate and solvents.

The Commission considered that the proposed transaction will not give rise to competition concerns. It investigated whether the operation would increase the ability and incentive of suppliers of acetone and phenol to coordinate their business conduct to the detriment of their consumers. However, the lack of transparency, the asymmetry between the market shares of various competitors (that would remain unchanged by the transaction) and the strong countervailing purchasing power of customers means that the possibility of coordination would be unaffected by the transaction.