BRUSSELS (Reuters) - EU antitrust regulators are investigating a bid by Swedish refiner Nynas to acquire most units of Royal Dutch Shell's <RDSa.L> Harburg refinery, concerned that the combined entity may have too dominant a position in three products.
The European Commission, which acts as the competition watchdog in the 27-country European Union, said it was worried there would be reduced or no competition in the markets for naphthenic base oils, naphthenic process oils and transformer oils.
It said the merged company would be the only producer of naphthenic base oils in Europe. These oils are used to produce industrial greases, metalworking fluids, adhesives, inks, insoluble sulphur, industrial rubber and fertilisers.
"The proposed merger would remove the only competing producer of naphthenic base oils in the European Economic Area," EU Competition Commissioner Joaquin Almunia said in a statement.
"The Commission needs to make sure that it would not raise production costs for European companies as well as prices for the customers of the various end products," he said.
The EU competition watchdog set an August 8 deadline for its decision on the deal. The companies unveiled the deal in 2011.
(Reporting by Foo Yun Chee; editing by John O'Donnell and Louise Heavens)