The Commission has approved the acquisition of the German chemicals company Cognis by rival BASF, subject to conditions. BASF is the largest chemicals producer in the world and its main markets include crude oil and natural gas, specialty chemicals, performance products, functional solutions, plastics and agricultural solutions. Cognis is a producer of specialty chemicals, functional products, olefins and nutritional ingredients.
Whilst the Commission’s investigation revealed that the merged firm would be subject to competitive pressure from a number of credible and significant competitors in the majority of markets where the parties’ products overlap, the Commission found that the proposed transaction would raise concerns in the market for hydroxy monomers (a chemical product used in coatings and adhesives) where the merged firm would have had a very strong position in a market where the concentration level is already high.
In response to these concerns, BASF has agreed to divest Cognis’ entire hydroxy monomers business and the multifunctional methacrylates and adducts businesses operating on one of Cognis’ sites. Further, BASF has agreed to take steps to make the divested business viable, which include granting intellectual property rights allowing the buyer of the divested business to create Polyalkylene Glycols (PAG) and PAG based lubricants, which are used in industrial formulations and household products.
IP/10/1630 - 30 November 2010