Blackstone, Celanese ditch cigarette deal on EU opposition
BRUSSELS: Blackstone Group LP and Celanese Corp ditched a bid to create a joint venture supplying materials for cigarette filters after European Union regulators demanded “excessive” divestments to allay antitrust concerns.
“Demands by the European Commission eliminated the advantages at the heart of the transaction,” Celanese chief executive officer Mark Rohr said in a statement.
“We worked hard and offered serious remedies to the European Commission and believed we had solved all competition issues.”
Celanese’s decision to withdraw from the EU’s merger review avoids a formal veto of the deal. The EU’s powerful antitrust arm is a tough hurdle for large deals, with two transactions vetoed last year and nine others withdrawn. Companies often offer hefty concessions to win approval. DuPont Co sacrificed large parts of its pesticide business to win clearance to merge with Dow Chemical Co last year.
The EU said the transaction “raised serious competition concerns that would significantly reduce rivalry” in the worldwide market, excluding China, where supplies for acetate tow – used for cigarette filters – are already concentrated in few hands, it said in an emailed statement. “It is the responsibility of the parties to propose remedies that address these concerns in full.”
The Blackstone-Celanese deal would have combined the world’s second- and third-largest manufacturers, excluding China, of acetate tow, a derivative of wood pulp used in making cigarette filters and other products. — Bloomberg