The EC approves the acquisition of BASF Colors & Effects by DIC

The European Commission reported this Monday that it approved the proposed acquisition of BASF Colors & Effects by DIC Corporation (DIC).

Approval is conditional on full compliance with a package of commitments offered by DIC.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “Pigments are essential inputs for many consumer products that require a coloring process, for example in the automotive and advanced plastics value chains. There are only a few alternative producers for these products and the combination of DIC and BASF Colors & Effects ran the risk of depriving customers of high quality pigments. This merger is approved on the condition that the companies dispose of the main DIC pigment manufacturing plant, thus preserving effective competition in the market ”.

BASF Colors & Effects and DIC are two market leaders in the production and sale of pigments and other colorants. In particular, they are the two main suppliers of certain categories of pigments worldwide.

Pigments are compounds that color a material by covering its surface or by mixing with it. They are obtained through a variety of chemical processes.

Within a given chemical class, there are typically several different pigments, with different chemical compositions, which provide different shades of color and technical characteristics. These individual pigments are often referred to as «color indices».

BASF

The European Commission’s research focused primarily on perylene pigments, which are a chemical class of red, garnet, violet and black pigments, as well as quinacridone pigments, a chemical class of pigments with yellowish-red dyes. to violet.

Perylene and Quinacridone pigments are suitable for the most complex applications such as automotive coatings, advanced plastics applications, and some industrial applications.

The European Commission was concerned that the proposed transaction, as originally notified, would have reduced competition in the market for the supply of perylene and quinacridone pigments.

The commitments fully address the Commission’s concerns as they almost completely eliminate the overlap between the activities of DIC and BASF Colors & Effects in the relevant pigments. The commitments ensure that the same number of suppliers remain active in these markets and that customers continue to enjoy the same level of choice.

Companies and products

DIC Corporation, based in Japan, is engaged in the production and sale of printing inks, organic pigments, and synthetic resins. With regard to pigments and other colorants, DIC operates primarily through its 100% subsidiary Sun Chemical.

BASF Colors & Effects, based in Germany, is a subsidiary of BASF SE and is active in the production and sale of pigments and other colorants.