BRUSSELS (Reuters) - The European Commission said on Wednesday it had approved Belgian chemical group Solvay's (BR:SOLB) planned $5.5 billion (£3.6 billion) purchase of Cytec Industries (N:CYT).
The Commission, which rules on antitrust issues in the European Union, said its decision was conditional on Solvay divesting activities in phosphor-based solvent extraction, used in the mining and refining sector to separate cobalt from nickel.
"The companies' activities are largely complementary and they are generally not active at the same level of the supply chain. However, both parties are present in the business for specialty chemicals for the mining and refining industry," the Commission said in a statement.
Customers in the refining industry worldwide would have very little alternative but to buy Solvay's Ionquest 290 and Cytec's Cyanex 272 products as existing competitors were small and their products' reputations not as strong.
This could ultimately lead to price rises, the Commission concluded.
Solvay has offered to divest its Ionquest brand, including transfer of technology, support and customer contacts.
The Commission said that the transaction, with this commitment, would not longer raise competition concerns.
Solvay's acquisition of Cytec will give it a bigger presence in the lightweight materials business where demand from the aerospace industry is booming.