Chinese state to buy Norwegian silicon firm

A Chinese state-owned chemical company will be allowed to buyout Elkem, the silicon producer, after the European Commission gave the go-ahead to the deal.

China National Bluestar, part of ChemChina and backed by the US private equity firm Blackstone Group, will pay $2bn for the Norwegian firm – itself a subsidiary of Orkla. The acquisition will give Bluestar access to technologies that could help China reduce its carbon emissions.

The deal was investigated by the commission because the Chinese state-owned silicon industry already holds a significant market share. The Competition Commissioner Joaquín Almunia said: "The commission examined this merger carefully for possible coordination by the Chinese state of market behaviour of Chinese state-owned companies in the same sector."

In a statement the commission said: "The Chinese silicon industry is highly dispersed with around 200 firms, many of which are privately owned. Most of the state-owned ones are also under the control of regional authorities, not the central government. Moreover, customers in Europe were of the opinion that there does not appear to be coordination of market behaviour amongst producers."

Almunia concluded: "Even assuming all Chinese state-owned firms in the sector acted as one, European consumers would still enjoy sufficient competition from other players serving the market." The Spanish company FerroAtlántica, Dow Corning of the US and Germany's Wacker are among the other key players in the industry.