London +4420 814 42225
Moscow +7495 543 9194
Kiev +38044 599 2950

Our Clients

Order Informer

Home > News >

EU conditionally approves DIC acquisition of BASF pigments business

December 09/2020

MOSCOW (MRC) -- The European Commission says it has approved, under EU merger regulation, the proposed acquisition of BASF's worldwide pigments business, BASF Colors & Effects, by DIC Corp. (Tokyo, Japan), reported Chemweek.

To address the Commission's competition concerns, DIC offered to divest a pigment manufacturing facility operated by its wholly-owned subsidiary Sun Chemical at Bushy Park, South Carolina. The approval is conditional on full compliance with a commitments package offered by DIC, including the Bushy Park divestment, the Commission says.

The Commission says it had concerns that the proposed transaction, as originally notified, would have reduced competition on the market for the supply of perylene and quinacridone pigments. DICs commitment to divest the Bushy Park facility, which manufactures a large majority of the company's perylene and quinacridone pigments, removes almost entirely the overlap between DIC's and BASF's activities in the relevant pigments, the Commission says.

The commitments ensure that the same number of suppliers will remain active on these markets and that customers retain the same level of choice, the Commission says. DICs divestment commitment includes the full transfer of the Bushy Park plant, including technology, brands, manufacturing equipment, and other intangible assets, to a manufacturer with proven expertise in pigment production, according to the Commission.

Pigments are essential inputs for many consumer products that require a coloring process, for example in the automotive and advanced plastics value chains. There are only a few alternative producers for these products and 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, says Margrethe Vestager, Commission executive vice president.

BASF Colors & Effects and DIC are market leaders in the production and sale of pigments and other colorants, and the two main suppliers of perylenes and quinacridone pigments worldwide, the Commission says. DIC is mainly active in pigments and colorants through Sun Chemical, the Commission says.

As MRC informed previously, German chemicals maker BASF said in early November it had put a project to build a petrochemicals complex in India worth up to USD4 billion on hold due to the economic uncertainty caused by the COVID-19 pandemic. BASF signed a memorandum of understanding with Abu Dhabi National Oil Company (ADNOC), Adani Group and Borealis AG in October 2019 to evaluate a collaboration to build the chemical site in Mundra, in Indias Gujarat state.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in  January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
Author:Margaret Volkova
Tags:Europe, pigments, PP, PE, LLDPE, PP random copolymer, propylene, HDPE, ethylene, petrochemistry, adhesives, paints and coatings, BASF, India, Russia.
Category:General News
| More

Leave a comment

MRC help


 All News   News subscribe