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Ecolab Settlement With U.S. Opens Way for Champion Deal

April 8 (Bloomberg) -- Ecolab Inc. reached a proposed settlement with antitrust regulators that will allow it to acquire Permian Mud Service Inc.’s Champion Technologies Inc., the U.S. Justice Department said.

The agreement would require the divestiture of Champion’s chemical-management services for deep-water oil and gas wells in the U.S. Gulf of Mexico, according to a statement by the department.

Without the transfer of Gulf assets, “the transaction would lead to higher prices, reduced quality service and diminished innovation,” according to the statement.

As a result of the proposed agreement, the transaction is expected to be completed “within the next several days,” Ecolab said in a statement.

“We are pleased to have reached an agreement with DOJ on this matter,” Douglas M. Baker, Ecolab’s chairman and chief executive officer, said in the statement.

The deal would bolster Ecolab’s oilfield chemicals business. The company placed the value of the transaction at about $2.3 billion, including assumed debt.

The settlement, if approved by the U.S. District Court in Washington, would resolve a lawsuit filed today by the department’s antitrust division to block the transaction by St. Paul, Minnesota-based Ecolab.

Complaint Allegations

The proposed acquisition would eliminate significant competition between Ecolab’s Nalco Company subsidiary and Houston-based Champion, “the two leading providers of production chemical management services for deepwater oil and gas wells” in the Gulf and “would likely substantially lessen competition,” according to the complaint.

The settlement would require Ecolab to divest to Muttenz, Switzerland-based Clariant Corp. specified Gulf assets of Champion, including a patent and licenses for technology and an option to buy a chemical blending facility.

Michael Monahan, a spokesman for Ecolab, declined to disclose the value assets Clariant is acquiring.

He said the divestiture agreement affects only about 3 percent of Champion’s business.

The case is U.S v. Ecolab Inc., 13-cv-00444, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Andrew Zajac in Washington at azajac@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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