The European Commission on Monday 7 December cleared the proposed acquisition of BASF Colors & Effects by DIC Corporation (‘DIC’). The approval is conditional on full compliance with a commitments package offered by DIC.
According to Margrethe Vestager, Executive Vice President responsible for Competition Policy, “the combination of DIC and BASF Colors & Effects risked depriving customers of high quality pigments. This merger is approved on the condition that the companies divest DIC's main manufacturing facility for pigments, thereby preserving effective competition in the market”.
BASF Colors & Effects and DIC are two market leaders in the production and sale of pigments and other colourants.
The Commission had concerns that the proposed transaction, as originally notified, would have reduced competition on the market for the supply of perylene and quinacridone pigments. To address the Commission's competition concerns, DIC offered to divest its pigment manufacturing facility, operated by its subsidiary Sun Chemical located in Bushy Park (South Carolina, US). The Bushy Park facility manufactures the large majority of DIC's perylene and quinacridone pigments. The divestment business includes the full transfer of the plant, technology, brands, manufacturing equipment, and other intangible assets and needs to be divested to a manufacturer with proven expertise in pigment production. (Original version in French by Lionel Changeur)