In a decision that confirms earlier forecasts by Antitrust Intelligence, the Spanish competition authority (CNMC) has conditionally approved the acquisition of Ercros by Esseco, following a Phase II review. As predicted in our May 2025 article, the transaction has been cleared with behavioral remedies, reflecting the limited scope for structural commitments. However, the risk of a negative decision was also real, given the market shares of the combined entity.
The merger, notified on 28 June 2024, involves Esseco’s unsolicited public offer to acquire full control of Ercros. After a detailed analysis, the CNMC concluded on 15 July 2025 that the operation posed serious threats to competition in the Spanish markets for liquid and solid potassium hydroxide (KOH) and potassium carbonate (K₂CO₃). These concerns arise from exceptionally high market overlaps and a lack of alternative suppliers with sufficient competitive strength.
In line with the dilemma we previously highlighted—either approval under light remedies conditions or outright prohibition—the CNMC opted for a conditional clearance, imposing behavioral remedies due to the absence of proposed commitments by the parties and the infeasibility of effective divestitures.
Competitive Concerns
The authority found that the merged entity would control over 80% of the market by volume and over 70% by value in all three product markets, with limited domestic production capacity and virtually no competitive pressure from remaining players. Both Esseco and Ercros are the main players in Spain and enjoy preferential access to competitive international supply—Esseco through integrated production in Italy, and Ercros via an exclusive agreement with Korean supplier UNID.
The CNMC determined that if left unaddressed, the transaction would create a dominant, vertically integrated player with the ability and incentive to foreclose rivals and tighten control over distribution.
Imposed Conditions
The CNMC’s clearance is subject to two conditions designed to mitigate the identified competition risks. First, Esseco is required to terminate Ercros’ exclusive supply agreement with the Korean producer UNID for potassium hydroxide (both liquid and solid) and potassium carbonate. Furthermore, the company is prohibited from entering into any new agreement with UNID involving sales of these products into the Iberian Peninsula for a period of five years.
Second, to safeguard access to distribution for rival suppliers, Esseco must refrain—again for a period of five years—from negotiating or enforcing exclusive arrangements with potassium product distributors operating in the Iberian market. This measure is intended to ensure that competitors, particularly any party that may assume the UNID contract, are not foreclosed from key commercial channels.
Impact on Stock
As expected, the decision impacted Ercros’ stock positively, with the stock price rising to €3.15 up from €2.96. However, the price is still far from any of the two bids offered by Esseco (€3.5) and Bondalti (€3.7). This could suggest that either investors are not yet aware of the CNMC’s decision or that they are not confident enough that the deal would close, even after a positive antitrust decision.
Ercros’ finances deteriorated for the last months and this may weight on the investors to take a decision. The company is expected to release the results for Q2 in the following days.
The CNMC still needs to take a decision on the other bid, made by Bondalti, which may also be the reason for investors to hold on their stocks before making a decision.
