The European Commission has opened an in-depth investigation into BASF’s proposed purchase of Solvay’s nylon (polyamide) business, saying the deal could reduce competition and lead to higher prices along the production chain. The EU regulatory body has until Oct. 31, 2018 to take a decision.

The German major announced last September that it had agreed to pay €1.6 billion for Solvay’s global integrated nylon operations, in a move aimed at boosting its access to markets in Asia and South America and gaining access to key raw material adiponitrile (ADN).

“We need to carefully assess whether the proposed acquisition would lead to higher prices or less choice for European businesses and, ultimately, consumers,” said the EU’s Competition Commissioner, Margrethe Vestager.

According to the EU regulatory body, the proposed transaction would create a company with a market size almost double that of the closest competitor. In addition, the merged entity would control substantial parts of the merchant markets along with production at all levels of the nylon chain.

Currently, Solvay is the only nylon producer in Europe that also makes the key intermediates, of which it sells a major portion to other nylon producers. BASF produces nylon intermediates, but not ADN, and uses nearly all its production internally.

Competitors raised fears during the Commission’s initial investigation that the merged group would stop supplying key products because of its own increased needs. These include ADN, hexamethylene diamine, adipic acid, hexamethylenediamine adipate salt, nylon 6.6 base polymer and nylon 6.6 engineering plastics.

In addition, the Commission noted that there is no indication that competition in the marketplace could be preserved by the entrance of new producers, since access to key feedstocks such as ADN is limited.