Eastman Chemical Co.has received approval from the European Commission for its proposed $3.4 billion acquisition of Solutia Inc., a provider of chemicals for use in consumer and industrial applications.
The EU's competition watchdog concluded that the transaction would not raise competition concerns because the parties are not active on the same markets and will continue to face sufficient competition.
The Commission's investigation examined the competitive effects arising from the vertical relationship between Eastman's upstream supply of 2-ethylhexanoic Acid (2-EHA) and Solutia's downstream supply of plasticizers for use in polyvinyl butyral (PVB) sheet.
The Commission found that post transaction, the merged entity would continue to face competition from a number of strong competitors upstream.
The merger would not result in any substantial change in the markets concerned since Solutia is not currently a customer of Eastman in the EEA, the Commission noted.
Under the terms of an agreement between the companies in January, Solutia stockholders will receive $22.00 in cash and 0.12 shares of Eastman common stock for each share of Solutia common stock.
Kingsport, Tennessee-based Eastman has identified annual cost synergies of around $100 million that are expected to be achieved by year-end 2013. The company is engaged in the manufacture and sale of chemicals, plastics, and fibers.