The European Commission has opened an ‘in-depth investigation to assess the proposed creation of an acetate flake and acetate tow joint venture by Celanese and Blackstone under the EU Merger Regulation’.
In a press note issued on Tuesday, the Commission said that it had concerns that the transaction might reduce competition in the acetate tow market.
‘The proposed joint venture would combine the acetate flake and tow activities of Celanese with Blackstone’s recently acquired portfolio company Acetow, which is active in the same areas,’ the Commission said…
‘The Commission has preliminary concerns that the proposed transaction could reduce competition in the acetate tow market. Celanese and Blackstone’s Acetow are, respectively, the second and third largest manufacturers of acetate tow at global level excluding China. The merged entity would become the new market leader with the risk of significantly reducing competition in the industry.
‘After its initial investigation, the Commission considers that Eastman and Daicel, the only two remaining major competitors, would not exert sufficient competitive pressure on the merged entity.
‘Moreover, the industry is characterised by high barriers to entry.
‘Finally, the Commission has preliminary concerns that the proposed transaction would make tacit co-ordination between tow suppliers more likely.’
The transaction was notified to the Commission on September 12.
The Commission now has 90 working days, until March 5, to make a decision.
The Commission said that the opening of an in-depth inquiry did not prejudge the result of the investigation.