Clariant Faces EUR 1.4 Billion Damages Claim from BASF over Ethylene Purchasing Market Infringement

Clariant, a Swiss specialty chemical company, is facing a significant legal challenge after being served with a damages claim by German chemical giant BASF. The claim, amounting to EUR 1.4 billion, alleges infringements of competition law on the ethylene purchasing market, which was previously sanctioned by the European Commission in July 2020. Clariant has firmly rejected the allegation and plans to defend its position in the proceedings.

The claim was served against four companies, including Clariant, with the court of Munich, Germany, on Thursday, 9 January 2025. Clariant has substantiated economic evidence that the conduct of the parties did not produce any effect on the market. The company has a strong culture of compliance, based on a clear Code of Conduct and an antitrust compliance program, and has fully cooperated with the relevant authorities throughout the investigation.



The potential financial implications of this damages claim for Clariant's shareholders are significant. If Clariant is found liable and ordered to pay the full amount, it could lead to a substantial decrease in the company's net worth and potentially impact its share price. According to Clariant's financial report for the fiscal year 2023, the company recorded sales of CHF 4.377 billion. A EUR 1.4 billion damages claim, if paid in full, would represent a significant portion of the company's annual sales, potentially affecting its profitability and financial stability.

This legal dispute could also impact Clariant's reputation and future business relationships. The company has already faced a fine of EUR 155.8 million in 2020 for its involvement in an ethylene purchasing cartel, which may have tarnished its image as a "sustainable and innovative specialty chemical company." The ongoing legal dispute with BASF could strain Clariant's relationship with other chemical companies, as it may be perceived as a less reliable or trustworthy partner. Clariant's ability to secure new business partnerships or maintain existing ones could be affected, as potential partners may be hesitant to work with a company embroiled in such a high-stakes legal battle.

To mitigate the risks associated with this claim, Clariant could consider strengthening its legal defense, negotiating with BASF, enhancing its compliance and internal controls, maintaining a strong financial position, and communicating effectively with stakeholders. By implementing these strategic moves, Clariant can better protect its interests and maintain the confidence of its stakeholders.

In conclusion, Clariant faces a significant legal challenge with the EUR 1.4 billion damages claim from BASF. The potential financial implications and impact on the company's reputation and future business relationships are substantial. Clariant must navigate this complex situation effectively to minimize the risks and maintain its position as a leading specialty chemical company.