European Commisson clears Eastman to acquire Solutia

The proposed acquisition of Solutia by Eastman Chemical has been cleared by the European Commission (EC) under European Union merger regulations.

As per the agreement, Solutia stockholders will each receive $22 in cash and 0.12 shares of Eastman common stock for each share of Solutia common stock.

The Commission said the proposed acquisition would not lead to any competition concerns, as the companies are not involved in the same markets.

The 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 plasticisers for use in polyvinyl butyral (PVB) sheet, according to the EC.

The commission found that post-transaction, the merged entity would continue to face competition from a number of strong competitors upstream.

The report said that 2-EHA producers would continue to have various alternative customers inside and outside the European Economic Area (EEA).

As Solutia is not a current customer of Eastman in the EEA, the merger is not expected to result in any substantial change in the markets.

The proposed acquisition was announced earlier in 2012.

US-based Solutia products include Saflex polyvinyl butyral interlayers used for glass lamination and Vistasolar ethylene vinyl acetate films for photovoltaic module encapsulation.