Brussels - Despite the heated dispute now embroiling the players, the EC has cleared the proposed acquisition of Huntsman Corp. by Hexion Specialty Chemicals Inc., as announced 30 June.
The Commission's decision depends on a commitment by Hexion to divest epoxy resin production and R&D facilities in Germany and in the US, after which, the EC feels, the merger would "not significantly impede effective competition in the European Economic Area (EEA) or any substantial part."
The EC said the activities of Hexion and Huntsman overlap at all three levels of the epoxy value chain (production of inputs, components and formulated systems) and lead to a number of horizontally and vertically affected markets.
To meet the concerns, Hexion offered to divest epoxy facilities at Duisburg and Stuttgart (Germany), at Argo (US), as well as its High Performance Resin Unit at Norco (US), and R&D assets in Duisburg, Stuttgart and Houston (US).
Meanwhile, polyurethane industry supplier Huntsman is suing Apollo Management LP and partners Leon Black and Joshua Harris, for $3000 million in response to their long-running merger deal that has now soured.
Huntsman said Apollo convinced the firm to drop a merger agreement in the works with Basell Service Co. BV last July and instead enter a $10 600 million deal with Apollo affiliate Hexion Specialty Chemicals Inc. - a deal those firms now are rescinding.
Huntsman's lawsuit is a response to one filed 18 June by Hexion and Apollo that claims they are not bound to closing the merger agreement at $28 per share. In that suit, Apollo cited increased net debt and lower-than-expected earnings for Huntsman as grounds for backing out of the merger.
Peter Huntsman (pictured), Hunstman president and ceo, has accused Apollo of falsely representing its commitment to close the Hexion merger to delay the process and lower the price of the deal. He said contrary to the claims of Apollo and Hexion, his firm is "a strong and profitable company, with ample financial resources to continue operating our businesses."
Hexion in turn called the suit filed by Huntsman "baseless" and continues to claim that continuing the merger under the original terms would render the combined company insolvent.