Brussels – The European Commission has granted conditional approval for the proposed acquisition of Ohio-based polymer group Omnova Solutions Inc. by Synthomer plc of London.
As part of a remedy package to address the EU’s competition concerns, Synthomer has offered to divest all its vinyl pyridine latex (VP latex) production, the Commission announced 15 Jan.
Vinyl pyridine latex is primarily used by tire manufacturers to improve safety and performance, according to the Commission.
Synthomer's divestment includes the full transfer of the required technology, brands, manufacturing equipment, and other intangibles assets to a supplier with the proven knowledge regarding the relevant chemistry.
According to the Commission, the market for the supply of VP latex in the European Economic Area (EEA) is highly concentrated, as Synthomer and Omnova are the only players with production capacity in the region.
The market, the Commission also noted, is characterised by “high barriers to trade” across regions.
“The acquisition would therefore have likely led to higher prices, reduced choice in products and lowered quality of services provided to customers,” it added.
Removing the “entire overlap” between the activities of Synthomer and Omnova, the divestment ‘fully addresses’ the EU’s concerns, the Commission added.
“The commitments also ensure that the same number of suppliers will remain active on the market of VP latex and that customers continue to enjoy the same level of choice,” it noted.
Synthomer supplies speciality chemicals for use in a variety of applications, such as medical gloves, paper, carpet, bedding and footwear. Its activities are mainly concentrated in Europe.
Beachwood, Ohio-based Omnova specialises in chemicals for a variety of applications, such as oil and gas, plastics and rubber. The company’s activities are mainly concentrated in the US.
The two companies reached signed the acquisition agreement in October last year.