BRUSSELS (dpa-AFX) - The European Commission has approved the sale of chemical giant BASF's coatings business to U.S. private equity firm Carlyle, subject to certain conditions. Carlyle is required to divest the global polysulfide business of specialty chemicals company Nouryon, which is part of Carlyle's investment portfolio, according to a statement from the authority. The move is intended to ensure competition in the aerospace sealants market and for polysulfides, a critical raw material for these products.

The EU Commission justified its decision by noting that Nouryon is one of only two global suppliers of these polysulfides and therefore wields significant market power. Polysulfides are essential for the production of aerospace sealants - a market in which BASF Coatings also operates. From the perspective of the Brussels antitrust regulators, the merged entity would likely have the ability and incentive to restrict competitors' access to polysulfides for aerospace sealants and could also exploit commercially sensitive information to the detriment of rivals.

Ludwigshafen-based chemical group BASF and Carlyle announced the transaction last October. The division was assigned an enterprise value of 7.7 billion euros. The business unit includes automotive OEM and refinish coatings as well as surface treatment technologies. BASF intends to retain a 40 percent stake in the division. The group is expected to receive 5.8 billion euros in cash before taxes./wea/DP/he