The European Commission has approved, under the EU Merger Regulation, the acquisition of the Phenolic Speciality Resins business of Hexion Inc by Black Diamond Capital Management LLC (‘Black Diamond’), both of the U.S. and Investindustrial S.A. of Luxembourg. Hexion’s Phenolic Speciality Resins Business sells dry granular moulding compounds under the brand names Bakelite, Durite and Cellobond.
Black Diamond is an investment advisory firm.
Investindustrial is a group of independently managed investment, holding and financial advisory companies. The transaction results in a vertical relationship between the companies, due to the production of unsaturated polyester resins by Polynt-Reichhold, a portfolio company of Black Diamond and Investindustrial, and the production of dry granular thermoset compounds using the above polymer as their input by Hexion’s Phenolic Speciality Resins business.
Given there are sufficient alternative sources of unsaturated polyester resins in the European Economic Area, the Commission found that it was unlikely that the merged entity would have the ability to restrict its rivals’ access to unsaturated polyester resins. In addition, given that Hexion’s Phenolic Specialty Resins business needs for unsaturated polyester resins represents only a small fraction of demand, the merged entity would not have the ability to restrict competitors’ access to a sufficient customer base. Therefore, the Commission concluded that the transaction would raise no competition concerns. The transaction was examined under the normal merger review procedure.