The President of UOKiK has given a conditional consent to the transaction on the laundry detergents market. Henkel will be allowed to take over a part of assets of entities belonging to the capital group PZ Cussons. The acquiring company will be forced to sell the rights to the Rex brand which includes washing powders and gels

The company Henkel, together with its subsidiaries, is making detergents and household cleaners, personal care products and adhesives. It owns, inter alia, the following brands: Persil, Rex, Silan and Pur. PZ Cussons Holdings, PZ Cussons Limited and PZ Cussons International belongs to the group PZ Cussons which is specializing in the production and sale of home care products, food and nutrition, and personal care products. Cussons Polska is making, among others, consumer products, Cussons International deals mainly with purchase of raw materials for their production, while Cussons Holdings manages the investments of the capital group’s subsidiaries.     

The transaction consists in acquisition of the brands: E, Kokosal and IXI, under which laundry detergents and dishwashing liquids are sold.

Market inquiry

In the course of the proceeding UOKiK carried out market inquiry, during which 12 market competitors of the entities participating in the transaction were asked about, inter alia, the size and value of their sales, production capacity and capacity utilization. The biggest trading networks and wholesalers were also asked to provide, among others, information on the structure of the sale by brand and the analysis of products’ prices.

When examining the transaction, the Office analyzed its consequences for the broader market of products, encompassing sale of all detergents, as well as for markets of particular detergents, such as washing powders, liquids and gels, and for market of fabric softeners and hand dishwashing liquids. The proceeding revealed that the acquisition of a part of assets belonging to PZ Cussons would lead to a significant increase of Henkel’s market power on the broader detergents’ markets as well as regarding the production and sale of washing powders and gels. The transaction would also result in the reduction of the number of entities offering these products, what could lead to the increase of their prices.    

Conditional consent

In the of UOKiK President’s opinion the negative effects of the transaction can be remedied by divesting of Henkel’s market potential connected with Rex brand. Currently, Henkel’s Rex branded washing powders compete with PZ Cussons’ IXI and E, whereas washing gels compete directly with E brand. According to the commitment decision, the company Henkel is obliged to sell, within the next 12 months, all the industrial and intellectual property rights relating to the Rex trade mark at the territory of Poland.             – In particular, this refers to the trade mark, trade name, logotype, layout, as well as know-how and formulas. However, as an exception, this does not cover the rights to packaging of products sold under the brand, since the company is obliged, in this regard, to provide an exclusive license for at least 5 years. The acquirer must not be part of Henkel capital group nor be controlled by its entities. It would have to obtain UOKiK’s approval which will be given only if the acquirer guarantees the production and sale of washing powders and gels – says Małgorzata Krasnodębska-Tomkiel, the President of UOKiK. Until the fulfillment of the obligation Henkel must maintain the sale of Rex branded products at the territory of Poland at the level of at least 80% compared to the year 2013, whereas the relation between the expenditures on advertising, promotion and information campaigns to the value of products’ sale must stay on the level not lower than in 2013.   

Under the law, any transaction is subject to notification to the antitrust authority if it involves undertakings whose total turnover in the preceding year exceeded EUR 1 billion globally or EUR 50 million in Poland. When assessing the concentration, the President of the Office may prohibit the transaction, issue a consent to the implementation of the transaction, or make it conditional upon the fulfillment of additional obligations by the undertaking. Since the year 2004, this has been the 19th decision obliging the undertaking notifying a transaction to meet specified conditions, and the second issued this year.

The decision is not final and may be appealed by the notifying entity to the Court of Competition and Consumer Protection (pl. SOKiK). Information on all concentration-related antitrust proceedings conducted by the Office is available on the UOKiK’s website.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 22 827 28 92, 55 60 314
Fax +48 22 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]