EU Clears BASF to Acquire Solvay's European Polyamide Business
The European Commission has approved BASF's acquisition of Solvay's integrated polyamide business in Europe. The deal, stalled due to antitrust concerns, is expected to finalize later in 2019.
Chemical giant BASF has received approval from the European Commission to acquire Solvay's integrated polyamide business in Europe. The deal, which has been in progress since 2017, faced significant hurdles from EU antitrust authorities.
Originally valued at €1.6 billion, the acquisition was held up in Europe due to concerns that BASF's purchase would reduce market competition and potentially lead to higher nylon prices. To address these concerns, BASF has agreed to divest certain assets related to the acquisition.
As part of the agreement with the commission, BASF and Solvay will divest production facilities for polyamide 6,6 and specialized polyamides located in France, Spain, and Poland to a "suitable buyer." Additionally, a joint venture will be established for the Chalampe facility in France, which produces adipic acid, a key raw material for nylon 6,6. Long-term supply agreements for adiponitrile (ADN) are also mandated to ensure raw material availability for the divested facilities.
The EU's intervention aims to maintain a competitive landscape in the European polyamide market, which serves industries such as textiles and automotive. The required divestments and joint venture structure are intended to foster the emergence of at least one other substantial market player, thereby increasing consumer choice.
BASF has sought to finance the acquisition, partly by selling off its own debts and plastics assets. The completion of this acquisition is anticipated in the latter half of 2019, following the fulfillment of all stipulated conditions, and is expected to bolster BASF's presence in the European polyamide sector.