Fine chemicals company DIC Corporation issued a notice on February 19 that it has “recognized an extraordinary loss” during the fiscal year 2020 linked to its acquisition of BASF’s global pigments business.
The Japanese firm entered into a deal to divest its Colors & Effects business to DIC for $1.27 billion in August 2019. At the time, the companies projected that the transaction would close in the fourth quarter of 2020 pending regulatory approvals.
“In connection with this acquisition, DIC has resolved to divest a pigment manufacturing business based at US subsidiary Sun Chemical Corporation’s plant in Bushy Park, SC,” DIC said in the release. “Because DIC and BASF Colors & Effects control substantial shares of the global pigments market, this divesture is being undertaken to ensure compliance with relevant antitrust laws.”
The Bushy Park plant produces high-performance pigments for automotive and additional applications. While the company said it expects to incur a loss of about $83 million in its fiscal year 2020 results because of the sale of the site, DIC said the divestiture’s impact on its strategy to expand its high-performance pigments business will be “negligible.”