The FTC gives conditional approval of Massy’s acquisition of IGL

Having concluded that the acquisition of Industrial Gas Limited (Jamaica) by Massy Gas Products Holdings Limited, without more, would likely result in a lessening of competition, the FTC negotiated a consent agreement with Massy to mitigate the anticipated adverse competition effect on the market for liquified petroleum gas (LPG).

In conducting the assessment, the FTC sought the views of other market participants on their scope for expansion and of commercial customers on whether they will likely be harmed by the acquisition.

The FTC concluded that the acquisition would result in a dominant supplier of LPG as Massy and IGL are the top two bulk suppliers of LPG island-wide in both the residential and commercial segments of the market. Further, there is a significant gap in market share between the combined Massy/IGL and Petcom, which is the third-largest bulk supplier of LPG.  There are twelve LPG suppliers, nine of which are recent entrants having entered the market in 2018 or after.

Through the consent agreement, Massy agreed to implement three measures to mitigate the anticipated adverse effects of the acquisition.  Essentially, Massy has agreed to (a) limit the scope of the non-compete clause (b) offer access to its LPG storage facilities in Montego Bay to other marketing companies under terms comparable to those under which IGL had accessed the facility, and (c) continue to engage in arrangements for the retrieval and surrender of empty LPG cylinders.

Based on the conditions set out in the consent agreement, the FTC issued a statement of non-objection to the consummation of the Sale & Purchase Agreement, which will see Massy acquiring 100 per cent control of IGL.

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