EU approves Carlyle's acquisition of BASF coatings division with conditions

The European Commission (EC) has granted conditional approval for the U.S. investment firm Carlyle's acquisition of German chemical giant BASF's coatings division. The green light is dependent on Carlyle fully complying with the commitments it offered, specifically the divestment of Nouryon's global polysulfide business to an approved buyer.

BASF had announced the sale of its automotive coatings unit, encompassing enamels, varnishes, and paints, to Carlyle, in partnership with the Qatar Investment Authority, last October. The transaction was valued at approximately 7.7 billion euros. The EC's initial concerns centered on the potential for the deal to create a market closure in the production and supply of polysulfides for aerospace sealants, an area where Nouryon operates, and in the production and supply of aerospace sealants themselves, where BASF's coatings division is active.

To address these preliminary competition worries, Carlyle proposed divesting Nouryon's worldwide polysulfide operations. The EC stated that the prospective buyer must possess significant expertise in the chemical industry or substantial experience in managing chemical sector companies. The Commission concluded that these commitments effectively resolve the identified competition issues by eliminating the vertical relationship between the two companies' activities in the polysulfide and aerospace sealant markets. The decision remains subject to the full implementation of these commitments, which will be overseen by an independent administrator and the EC itself.