The European Commission has officially cleared global investment firm The Carlyle Group’s proposed acquisition of BASF SE’s coatings division, BASF Coatings. However, the regulatory green light is strictly conditional upon Carlyle fulfilling a series of structural commitments designed to preserve fair market competition within the critical aerospace chemicals sector.
The antitrust intervention stems from Carlyle’s existing portfolio, which includes Nouryon Ltd., a major global specialty chemicals manufacturer. Nouryon acts as a dominant force in the production of polysulfides, an essential and irreplaceable chemical ingredient utilized in the production of aerospace sealants. Conversely, BASF Coatings is a primary producer and supplier of those exact finished sealants to aerospace original equipment manufacturers.
Following a Phase I merger review initiated in April 2026, the European Commission flagged severe vertical integration concerns. Regulators warned that the newly merged entity would possess both the market power and the economic incentive to restrict competing sealant manufacturers from accessing Nouryon’s polysulfides. Because Nouryon is one of only two global suppliers of this critical input, and switching chemical suppliers is an incredibly slow and costly process for aerospace firms, the Commission feared the deal would effectively foreclose on BASF Coatings’ industry rivals. Furthermore, regulators worried that Carlyle could exploit Nouryon’s access to commercially sensitive data regarding competitors’ supply chains to give BASF Coatings an unfair market advantage.
To dismantle these antitrust roadblocks, Carlyle offered a comprehensive remedy package to completely eliminate the vertical overlap. The firm has committed to divesting Nouryon’s entire worldwide polysulfides business to an independent buyer. This forced sale includes the transfer of Nouryon’s dedicated production plant in Greiz, Germany—which manufactures the entirety of its polysulfides supply—along side all associated assets, regulatory licenses, supply contracts, and personnel.
Under the terms of the conditional approval, Carlyle must secure a buyer possessing proven expertise in the chemical industry or a financial backing team well-versed in managing industrial supplier qualification processes. The European Commission, aided by an independent monitoring trustee, will oversee the implementation of these commitments and retain final approval over the suitability of the proposed purchaser to ensure market stability in the European Economic Area.
