US FTC Files to Block Tronox-Cristal Merger
Just days after Tronox received a green light from European regulators for its takeover of Cristal, albeit with conditions, the US Federal Trade Commission (FTC) has filed suit against the US titanium dioxide (TiO2) producer in the Columbia District Court to block the deal.
The FTC said the merger would violate antitrust laws by significantly reducing competition in the North American market for chloride-route TiO2. It alleges that if consummated, the acquisition “would increase the risk of coordinated action among the remaining competitors and increase the risk of future anticompetitive output reductions by Tronox.”
Tronox said it has repeatedly asked for the FTC to follow its long-established practice of filing suit in federal court to block an acquisition. This, the company said, would give it the opportunity to show how the combined entity’s ability to capture synergies and increase production would enable it to better compete with global market leaders and lower-cost Chinese producers.
The US pigment producer has previously accused the agency of deliberately using its administrative process to delay the deal until the agreement with Cristal expires. It filed a lawsuit in the US District Court for the Northern District of Mississippi in January seeking an injunction to prevent the FTC doing this.
“This output-enhancing acquisition positions Tronox to become a leading TiO2 producer, capable of succeeding in a fiercely competitive global market,” said Jeffry Quinn, president and CEO of Tronox. “I believe we convincingly demonstrated that the FTC's objections to the Cristal transaction are entirely misplaced and that the transaction will benefit consumers through significantly increased production of TiO2 and efficiencies arising from our post-merger increased vertical integration. We now look forward to our long-awaited day in court and the opportunity to demonstrate how this transaction will benefit customers throughout North America and around the world.”
Tronox filed its notification form under the Hart-Scott-Rodino Antitrust Improvements Act on Mar.
14, 2017, and the waiting period has been extended several times. The EU approval, granted on Jul. 4, is conditional on Tronox selling chloride-based TiO2 used in paper laminate.