EU: Blackstone, Celanese cancel cigarette deal

Celanese, a global technology and specialty materials company, announced that it is abandoning its merger agreement with Blackstone’s Rhodia Acetow business and that the two parties have withdrawn their notification of the proposed joint venture from the European Commission. The parties were unable to reach an agreement with the EC on acceptable conditions to allow the proposed joint venture to proceed.

“We are disappointed with the approach that the European Commission has taken on this case and we will be reviewing our strategic options,” said Mark Rohr, chairman and chief executive officer of Celanese. “Celanese will continue to meet customer current and evolving needs efficiently while providing the highest level of quality and service.”

The companies announced plans on June 18, 2017, to combine the Cellulose Derivatives business of Celanese with Rhodia Acetow to create synergies in the acetate tow market. Competition approval, without any divestitures, was granted in Mexico, Turkey, China, and Russia. The EC required excessive divestitures that would have undermined the benefits of the transaction.

“We worked hard and offered serious remedies to the European Commission and believed we had solved all competition issues identified by the European Commission. The benefits were substantial for our customers, our employees and jobs in the European Union,” Rohr said. “Unfortunately, demands by the European Commission eliminated the advantages at the heart of the transaction.”

Full Content: Bloomberg

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