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EU Regulators to investigate Blackstone, Celanese acetate tow activities

acetate tow
Europe   Joint venture

The European Commission has opened an in-depth investigation to assess the proposed creation of an acetate flake and acetate tow joint venture by Celanese and Blackstone under the EU Merger Regulation.

The Commission has concerns that the transaction may reduce competition in the acetate tow market.

The proposed joint venture would combine the acetate flake and tow activities of Celanese with Blackstone's recently acquired portfolio company Acetow, which is active in the same areas. The joint venture would be a new market leader in the already highly concentrated acetate tow market.

Acetate flake is a chemical derivative of wood pulp that is mainly used in the manufacture of acetate tow. Acetate tow is a fibrous material made from acetate flake and is used to manufacture cigarette filters.

The Commission has preliminary concerns that the proposed transaction could reduce competition in the acetate tow market.

Celanese and Blackstone's Acetow are, respectively, the second and third largest manufacturers of acetate tow at global level excluding China. The merged entity would become the new market leader with the risk of significantly reducing competition in the industry.

After its initial investigation, the Commission considers that Eastman and Daicel, the only two remaining major competitors, would not exert sufficient competitive pressure on the merged entity. Moreover, the industry is characterised by high barriers to entry.

Finally, the Commission has preliminary concerns that the proposed transaction would make tacit coordination between tow suppliers more likely.


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