Celanese and Blackstone today abandoned plans to merge their acetate tow businesses after failing to reach agreement with the European Commission on conditions to allow the proposed joint venture to proceed. Celanese said the commission “required excessive divestitures that would have undermined the benefits of the transaction.”
Celanese announced plans in June to combine its cellulose derivatives business with the former Rhodia Acetow cellulose acetate business, which Blackstone had recently acquired from Solvay. Celanese was to own 70% and Blackstone 30%. Expected annual revenue for the venture was approximately $1.3 billion.
“We are disappointed with the approach that the European Commission has taken on this case and we will be reviewing our strategic options,” said Mark Rohr, Celanese chairman and CEO. “We worked hard and offered serious remedies to the European Commission and believed we had solved all competition issues identified.”
Commission antitrust officials opened an in-depth Phase II investigation in October and set out a statement of objections in January. Celanese and Blackstone’s Rhodia Acetow business are, respectively, the second- and third-largest makers of acetate tow at the international level outside China. The commission said it was concerned that Eastman Chemical and Daicel, the only two remaining major competitors, would not exert sufficient competitive pressure on the merged entity. It also noted high barriers to entry in acetate tow.
By Robert Westervelt
Source: Chemical Week
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