Swiss chemicals company Clariant is bracing for a legal battle after German rival BASF filed a €1.4 billion ($1.4 billion) lawsuit against Clariant and other three companies. The lawsuit stems from a 2020 European Union (EU) antitrust ruling that found these companies participated in an ethylene purchasing cartel.

BASF's Claim and the 2020 EU Antitrust Ruling

BASF's lawsuit alleges that Clariant, along with other companies, inflicted damages due to their involvement in the cartel. In 2020, the EU Commission fined Clariant, Mexico's Orbia, and U.S. group Celanese a total of €260 million for colluding to manipulate ethylene prices, violating EU antitrust regulations. Westlake, another company involved, was exempt from fines after whistleblowing the cartel to the Commission.

Clariant's Response and Market Reaction

Clariant vehemently denies any wrongdoing and asserts that their actions did not affect the market. The company has vowed to "adamantly defend its position" throughout the legal proceedings. News of the lawsuit caused Clariant's share price to dip by 1.5% by 1:00 PM GMT.

Uncertain Compensation Distribution

According to Clariant, BASF's lawsuit targets four companies involved in the cartel. However, the exact distribution of any potential compensation awarded by the court remains unclear. A separate ruling will determine how to divide any compensation among the companies after a final verdict is reached.

EU Commission's 2020 Settlement

The EU Commission's 2020 investigation revealed that the four companies (Clariant, Orbia, Celanese, and Westlake) acknowledged their participation in the cartel and agreed to settle the case. This new lawsuit from BASF highlights the potential for long-lasting financial repercussions for companies involved in anti-trust violations, even after settlements with regulatory bodies.

Clariant is a leading Swiss specialty chemicals company focused on developing and delivering sustainable solutions for diverse industries. Their core product lines encompass catalysts, which accelerate chemical reactions, care chemicals used in personal care and home care products, and adsorbents and additives that enhance the performance of various materials. By prioritizing sustainability, Clariant aims to contribute to a more environmentally responsible future.