China Sets Conditions On Lucite Acquisition

Japan's Mitsubishi Rayon has cleared regulatory hurdles to its proposed $1.6 billion acquisition of Lucite International (C&EN, Nov. 17, 2008, page 8). The deal will create the world's largest producer of methyl methacrylate (MMA), used to make acrylic plastics. However, the Chinese Ministry of Commerce (Mofcom) set significant limitations on the deal because, it contends, the merged company would have an excessively strong position in the country's MMA market. Lucite operates an MMA plant in Shanghai's Caojing Industrial Park, and Mitsubishi's own Chinese unit is in Huizhou. Mofcom claims that a combination of Mitsubishi and Lucite would control 64% of the Chinese market and have the ability to curtail competition. Mofcom agreed to the deal on the condition that Lucite sell 50% of its Chinese output at cost to one or several unrelated MMA producers for a period of five years. Mitsubishi originally expected to complete the deal by the end of January. It now expects to wrap it up by the end of May.