The deal involves the only production base of adiponitrile (ADN) in Europe, which was previously questioned by antitrust regulators.

According to Reuters, the German chemical giant BASF SE has already entered   the approval process for the 1.6 billion euro ($1.85 billion) acquisition of the nylon   business of the Belgian chemical group Solvay SA, and now the plan has the latest progress.

A Reuters report from Frankfurt on January 8 quoted informed sources as saying that BASF plans to sell part of the assets of the Solvay Nylon business to several companies that had competed in the business in 2017, including SK Innovation in South Korea, China Blonde Technology Corporation and SK Capital Private Equity, the parent company of Ascend Performance Materials, a producer of adiponitrile (ADN). ADN is an important raw material for the production of hexamethylenediamine (HMD), while HMD is the main component of nylon 6/6. With excellent heat resistance, nylon 6/6 is widely used in the automotive industry.

According to Reuters, BASF's proposed business includes engineering resin assets that attract chemical companies such as Lanxess.. According to reports, the core value of the business is expected to reach 60 million euros, and the enterprise valuation is 7 to 8 times this figure.

Reuters said that a BASF spokesperson declined to comment on the matter and that the reporter was unable to contact the Solvay spokesperson.

The report did not specify which product lines will be sold, but before BASF issued an acquisition statement, Solvay has been actively developing research and development of other engineering resins including polyphenylene sulfide. At the same time, BASF presented its new portfolio of polyphthalamide (PPA) compounds at the 2018 German Plastics Industry Trade Fair (Fakuma 2018).

The European Commission said it would decide whether to approve BASF's acquisition plan by January 25, which had previously been questioned by antitrust regulators. The transaction involves the only ADN production site in Europe. Since only a few producers currently supply the key raw materials for this nylon product, antitrust regulators are concerned that the price of nylon products will continue to rise.

In 2018, due to the shortage of ADN, the supply of nylon 6/6 continued to be tight, and many resin buyers predicted that the phenomenon would not be improved  in 2019.

A BASF spokesperson said the deal aims to strengthen its vertical integration by acquiring the company's only missing link in the nylon 6/6 production process. In addition, BASF also said that in the past ADN was exclusively produced by Solvay, and now only transfer ADN production from Solvay to BASF.

In order to eliminate the concerns of the European Commission, BASF provided a series of remedial plans in October 2018, expressing its willingness to transfer some of Solvay's assets and technology to other companies. With this significant acquisition, BASF can improve its nylon business and expand its business in Asia and South America, while Solvay can focus on the high-margin applications in the aerospace, automotive and oil and gas industries by selling the nylon business.

Article source: buy plastic net