London-headquartered Synthomer has received conditional clearance from the European Commission to acquire Omnova Solutions, a US specialty chemicals and additives manufacturer based in the US state of Ohio – in exchange for concessions.

The Commission said it concluded during its phase 1 review of the proposed transaction that commitments offered by Synthomer, requiring it to divest its small VP Latex business in Germany, which accounts for 0.5% of the London-based company’s 2018 sales volume, did not raise any competition concerns.

The all-cash transaction assigns an enterprise value of £654 million to Omnova.

Although the structural remedy offered by the polymer dispersions and synthetic latex producer to address any regulatory concerns regarding the overlap between the two companies' VP Latex operations is considered financially immaterial, EU rules stipulate that the sale process must be finalized prior to the acquisition’s closing.

Synthomer said it has already received a number of expressions of interest for the latex unit. It envisions completing the acquisition of Omnova before the end of the current first quarter, following the approval of Turkish antitrust authorities, expected in early in February.  

Calum MacLean, Synthomer’s CEO, said the purchase of Omnova is “strategically and financially compelling” and will materially expand his company’s international business into North America while at the same time lifting its profile in Europe and Asia.

MacLean added that Omnova also has an attractive financial profile, and the deal has “significant expected synergy benefits.” The combined company will have 38 production facilities and a portfolio ranging from acrylic, vinyl and specialty emulsions polymers to styrene butadiene and acrylonitrile‐butadiene latexes.

Synthomer emerged as a new company in 2002 through Yule Catto’s fusion of subsidiaries Harlow Chemical and Synthomer with Revertex Belgium.