EUROPEAN COMMISION BLOCKS LENZING, ACORDIS MERGER.

Daily News Record, October, 2001 by FALLON, JAMES

LONDON -- The European Commission has blocked the proposed acquisition of a majority of fiber manufacturer Lenzing AG, by CVC Capital Partners, ruling the deal would be anticompetitive and prompt a new structure for its Acordis unit.

CVC acquired about 80 percent of Lenzing in February from Bank Austria for an undisclosed sum. The deal was subject to regulatory approval and the EC began a detailed probe of the agreement in June. CVC planned to merge Lenzing with the other fiber company, Acordis, in which it holds a 64 percent stake, into a company provisionally called NewCo. The merger would have created the world's only manufacturer of lyocell and the largest producer of rayon.

But the commission last week prohibited the deal. "The combination of...