BRUSSELS—The European Commission has conditionally approved Evonik A.G.'s acquisition of U.S.-based Huber Silica under the European Union Merger Regulation.
The commission announced June 22 that the approval was conditional on the divestment of some of both companies' activities related to precipitated silica, a chemical used in tires, toothpaste, defoamers, paints and coatings.
The commission's investigation concluded that the transaction raised competition concerns in the markets for precipitated silica for toothpaste and for defoamer applications; and hydrophobic precipitated silica, which is used in several products including defoamers, paints, coatings, food and feed additives.
To address the competition concerns, Evonik has been asked to divest its precipitated silica business for dental applications in Europe, Middle East and Africa.
Huber Silica has been offered to divest its precipitated silica business for defoamer applications in the European Economic Area (EEA); and hydrophobic precipitated silica business in the EEA.
Evonik announced in December the acquisition the silica business of U.S.-based JM Huber Corp. for $630 million, enabling it to expand its position in North America and Asia.
The firm said Huber Silica would significantly strengthen its resource efficiency growth segment and offers the opportunity to strategically develop Evonik's portfolio.
At the time Evonik said it expected the transaction to be complete in the second half of 2017, subject to the approval of relevant authorities.
JM Huber Corp. is one of the largest, family-owned businesses in the US with a broad product portfolio ranging from specialty chemicals to the forestry sector. Huber employs about 4,000 people in 20 countries.
Based in Germany, Evonik is a global specialty chemical company that's active in more than 100 countries with 33,500 employees and nearly $14.2 billion in sales. The firm said it has a leading position as a supplier of silica for tire manufacturers and the paint and coatings industry. Evonik's silica products also are being applied as flow additives and carriers for the manufacture of foodstuffs, cosmetics, pharmaceuticals and silicones.