2002/174/EC: Commission Decision of 3 May 2000 declaring a concentration to be compatible with the common market and the EEA Agreement (Council Regulation (EEC) No 4064/89) (Case No COMP/M.1693 — Alcoa/Reynolds) (Text with EEA relevance) (notified under document number C(2000) 1176)

• CELEX: Regulation (EEC) No 4064/89
• Articles: 4

Article 1

The concentration by which Alcoa Inc. acquires, within the meaning of Article 3(1)(b) of Regulation (EEC) No 4064/89, control of the undertaking Reynolds Metals Company is declared compatible with the common market and the functioning of the EEA Agreement.

Article 2

This authorisation is subject to full compliance by Alcoa Inc. with the commitments described in paragraphs 130 to 138 and formally set out in the undertaking annexed hereto.

Article 3

This Decision is addressed to: Alcoa Inc. 201 Isabella Street Pittsburgh, PA 15212, USA Mr. Kurt R. Waldo, Esq.

Assistant General Counsel

Done at Brussels, 3 May 2000.

For the Commission

Mario Monti

Member of the Commission

(1) OJ L 395, 30.12.1989, p. 1; corrected version OJ L 257, 21.9.1990, p. 13.

(2) OJ L 180, 9.7.1997, p. 1.

(3) OJ C 342, 5.12.2001.

(4) Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the Commission notice on the calculation of turnover (OJ C 66, 2.3.1998, p. 25). To the extent that figures include turnover for the period before 1 January 1999, they are calculated on the basis of average ECU exchange rates and translated into EUR on a one-for-one basis.

(5) See cases IV/M.470 - Gencor/Shell, Decision of 29 August 1994 (OJ C 271, 29.9.1994, p. 3); and IV/M.1003 Alcoa/Inespal, Decision of 24 October 1997 (OJ C 29, 27.1.1998, p. 7).

(6) London Metal Exchange.

(7) Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets and marked with an asterisk.

(8) Source: The market for alumina - Current trends and future prospects, James F. King, October 1999, p. 70.

(9) Estimation by Dr. Kahwaty, LECG, February 2000.

(10) Source: see footnote 7; at p. 37.

(11) Source: "World Capacity and Market Report, Primary Aluminium", James F. King, August 1999, p. 5.

(12) Source: CRU Report Aluminium Cost service 1999-2000, Alumina Refining Costs to 2002, page 45.

(13) Although the web site of Kaiser displays a photograph showing preparatory re-construction work being carried out (ex., scaffoldings, etc.), it has been reported in the press that the US Mine Safe and Health Administration (MSHA) might begin a criminal investigation of the explosion. This would endanger the pay-out of the insured capital needed to fund the project. Kaiser was, however, able to obtain the environmental permit from the Louisiana Department of Environmental Quality.

(14) Note: "kt" means kilo-tons (thousand tons), whereas "MT" means metric tons (not million tons).

(15) Bauxite is a natural mineral ore containing around 30 % to 60 % aluminium oxide. Once mined, bauxite is refined to extract alumina.

(16) According to CRU the cheapest bauxite in the world expressed in US dollars (USD) per ton would be in Guinea (Friguia belonging to the Government USD 2/t), Australia (Gove belonging to Alusuisse with USD 2,55/t) and India (Belgaum belonging to Alcan and Indalco with USD 2,7/t). The Darling Range mines would be next with an average of USD 5/t. The average price is ± USD 10/t. The most expensive bauxite in the world is in Greece (USD 25/t).

(17) Although Alcoa has only 60 % ownership interest in its three Darling Range refineries it is entitled to off-take 100 % of the alumina produced.

(18) Together, commodity hydrates and calcined alumina not further processed into SGA are also referred to as "non-metallurgical" aluminas.

(19) It has to be remembered that alumina refineries and smelters normally run at full capacity utilisation.

(20) Refers to thermodynamic stability.

(21) Comp/M.1663.

(22) Standard primary aluminium, designated as 99,7 % or P1020, contains 0,10 % and 0,20 % iron and silicon impurities, respectively.

(23) It has to be noted that due to the different production process used in the production of P0404, the likelihood of environmental hazards is increased (e. g., gaseous emissions are too high, etc.).

(24) These companies have no affiliates or other assets in the Community territory and the Commission could not enforce Article 11(5) of the Merger Regulation, which places firms under a legal obligation to answer formal requests for information, because of lack of jurisdiction.

(25) For example, a smelter may get an order from a customer located near it. Since the smelter pays the freight it would have an incentive to use its P0404 for that customer and purchase P0404 produced at a smelter located closer to another customer. Reynolds has thus supplied McCook with P0404 produced at a Southwire smelter in Kentucky.

(26) As P1020 contains more silicone than iron, if P0303 and P1020 are mixed so that the mixture contains less than 0,04 % silicone, the mixture would contain less than 0,04 % iron. The ratio of P0303 to P1020 needed to obtain at least P0404 can be obtained from the following formula: assume 1 pound of P1020 and x pounds of P0303 are purchased. 0,04 % silicone is obtained when x solves the following equation: [0,04 = (0,2 * 1 + 0,03 * x)/(1 + x)]*. x = 16 solves this equation.

(27) OJ L 61, 2.3.1998, p. 1.

Schedules & Appendices

ANNEX

The full English text of the Commitments referred to in Article 1 may be consulted on the following Commission website:

http://europa.eu.int/comm/competition/index_en.html