Germany's BASF said on Monday that the company has made multiple commitments to the European Union, hoping to address antitrust concerns over its planned acquisition of Solvay's nylon business for 1.6 billion euros ($ 1.85 billion). .
BASF's plan to acquire Solvay SA's nylon business was launched in September 2017, triggering an European Commission investigation into the merger and competition of the two companies, including controls on the supply of raw materials. BASF said it has proposed not to acquire "some parts" of Solvay's European nylon business, but the company did not specify which parts it would abandon.
BASF did say that the transaction will not include the innovative capabilities and manufacturing assets of Solvay's intermediates and engineering plastics business.
The chemical company said it was optimistic that the deal would go smoothly after making concessions. "The regulatory approval process for the acquisition of Solvay's nylon business is progressing," BASF tweeted on Monday.
An online record of the EU competition enforcement agency has confirmed that BASF submitted a commitment on the deal on Monday, but did not disclose further details.
"The European Commission is reviewing this proposal and will submit it for market testing before completing the review process," BASF said.
According to the EU, market tests take into account the views of market participants, and if remedial measures are accepted, they will be binding on companies under review.
An independent trustee will then be appointed to monitor compliance with the commitments.
In the BASF / Solvay merger, regulators have become increasingly concerned that the deal will place restrictions on plastic raw materials, driving up competitors' costs and consumer product prices.
BASF said the deal was a way for the combined company to expand nylon production. But unlike BASF, Solvay produces a material called adiponitrile (ADN), which is a key nylon raw material that is sold to other manufacturers in the supply chain. Part of the cause of concern.
On Monday, BASF did not say how its concessions promised to deal with the ADN issue, but the company said in a press release that it was building a production capacity for the material through a merger.
The company said: "By strengthening our engineering plastics product portfolio, further expanding our channels, entering key growth markets in Asia and South America, and strengthening the value chain through backward integration of key raw materials such as ADN … BASF will Its key strategic goals. "
According to the company statement: "BASF will continue to work closely with the European Commission. The European Commission is expected to make a decision in early 2019." As of now, the transaction has been approved by eight of the world's 10 regulators.