Brussels, 30/01/2004 (Agence Europe) - On Friday the European Commission agreed to swap a commitment by Aventis to divest its remaining 15% stake in Rhodia with a commitment to sell its indirectly held 49% stake in Wacker Chemie. The Commission, in 1999, granted regulatory approval to the merger between Hoechst and Rhône-Poulenc, which created Aventis, on the condition of certain sell-offs to address competition problems. Rhodia's declining financial health since then has made the sale difficult. The sale of Wacker-Chemie fulfils the same purpose since the competition issues resided in the overlaps between the two firms.
The Commission, in August 1999, cleared the merger between Hoechst and Rhône-Poulenc subject to a number of commitments. The combined company was renamed Aventis.
One of the commitments consisted in the divestment of Rhône-Poulenc's 67.3% stake in chemicals company Rhodia. The management of Rhodia also had to remain separate from Wacker-Chemie's, itself a joint venture between Hoechst and the Wacker family, until the date of the divestiture of Rhodia. This was to prevent any coordination in the markets for silicone sealant, silicone elastomer and polymer powder. Although Rhône-Poulenc sold 42.3% of its shares in Rhodia already in 1999 and a further 9.9 % in 2003 it is still the largest shareholder with 15% in the company. In view of the continuing deterioration in Rhodia's financial health and the upcoming restructuring of the company, the Commission has agreed to replace the Rhodia commitment with a commitment to divest its indirectly held 49% stake in Wacker-Chemie within a confidential timeframe. Aventis undertakes to continue maintaining the managements of Wacker-Chemie and Rhodia separate. The Commission has agreed to the new commitment given the dire financial situation of Rhodia and the urgent need to remove uncertainty over the capital structure of Rhodia so as to facilitate its restructuring. The Commission and the US antitrust authorities consulted on the request given that the Rhodia commitment had been given to both regulators.