The commission said the approval was conditional on the “divestiture of a remedy package" that will avoid nylon price increases in the EU region.
January 22, 2019 by Canadian Plastics
A European Union Commission has granted conditional clearance for German chemical maker BASF SE to acquire Solvay SA’s nylon business.
“Our decision will allow for the creation of a significant European player in this market because the commitments offered by BASF and Solvay ensure that the merger will not lead to higher prices or less choice for European businesses and, ultimately, consumers,” commissioner Margrethe Vestager said in a Jan. 18 statement.
The deal was first announced in September 2017, and is now expected to close in the second half of 2019 after all remaining closing conditions have been fulfilled, including the sale of a so-called “remedy package” to a third party.
During the approval process in Europe BASF made commitments to address the competition concerns of the EU Commission, primarily that the acquisition would lead to too few suppliers of nylon, and therefore price increases in a number of markets related to the nylon industry in the EU region.
As a solution, BASF is required to divest parts of the original transaction scope to a third-party buyer, namely manufacturing assets and innovation capabilities of Solvay’s polyamide business in Europe.
Once completed, the Solvay business unit will be integrated into BASF’s performance materials and monomers divisions. The nylon businesses to be acquired in the Americas and in Asia will not be affected by the commitments.