09 April 2013 00:09 [Source: ICIS news]
HOUSTON (ICIS)--US-based producer Ecolab announced on Monday that it expects to complete the acquisition of specialty chemicals firm Champion Technologies within the next several days.
The transaction, which Ecolab said is valued at about $2.3bn (€1.8bn), still requires clearance from the federal government.
The US Department of Justice’s (DOJ) antitrust division filed a civil lawsuit in US district court on Monday to block the proposal. However, the department also filed a proposed settlement that, if approved by the court, would resolve competitive concerns and the lawsuit.
Explaining the lawsuit, Leslie Overton, deputy assistant attorney general at the DOJ’s antitrust division, said: “Ecolab’s subsidiary, Nalco Company, and Champion are currently the largest and second-largest providers of production chemical management services to deepwater wells in the US Gulf of Mexico and have vigorously competed against one another to the benefit of their customers.”
The department’s complaint alleged that the acquisition would “eliminate significant competition between Nalco and Champion in the already highly concentrated market”.
Overton said: “The proposed remedy will preserve competition to provide these critical services, which support efficient production of oil and gas in deepwater environments.”
Under the proposed settlement, Ecolab must divest itself of deepwater production chemical management service provider Clariant Corporation and affiliate Clariant International.
The divestment will include Champion’s best-selling production chemical and exclusive licences to all other production chemicals.
Ecolab must also provide an option for whoever buys its Clariant interests to purchase a Champion chemical blending facility and related equipment and enable that party to recruit Champion employees.
The agreement impacts only about 3% of Champion’s business, Ecolab said.
Douglas Baker Jr, CEO of Ecolab, said: “We are pleased to have reached an agreement with the DOJ on this matter. We also remain very excited about the potential of this transaction. The reasons we were attracted to Champion in the first place remain solidly in place.”
In October, Ecolab announced it would acquire Champion for $2.2bn. In December, it said Champion’s parent company, Permian Mud Service, would spin off the downstream process and water solutions business before the acquisition, reducing the deal to $2.16bn.
Ecolab has been in discussions with US competition regulators to gain clearance for the acquisition.
“Champion strengthens our position in the fast-growing oil and gas services industry,” Baker said. “It bolsters our ability to better serve customers by bringing important and complementary geographic and technology strengths to our global energy business – particularly in the upstream production area – and enables us to more fully capitalise on the significant developing oil and gas market opportunities.”
($1 = €0.77)
Follow Tracy on Twitter
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections