Chemicals and minerals maker Tronox now faces a court battle with federal regulators who are suing to block its planned US$1.7 billion acquisition of the titanium dioxide business of Saudi Arabian chemical and mining company Cristal.
The Federal Trade Commission (FTC) is suing based on concerns the transaction would squeeze out competition in the North American market, according to several antitrust experts. But officials at Stamford-based Tronox have vowed to fight the litigation, saying they are committed to fair business practices.
FTC officials assert the acquisition would allow Tronox and another supplier, the Wilmington, Delaware-based Chemours Co, to control the majority of chloride titanium dioxide sales in North America and more than 80% of chloride titanium dioxide manufacturing capacity in the same region. The remaining suppliers would then be more likely to coordinate, according to the FTC.
“It is extremely disappointing that the FTC has taken this unmerited action to try to block a highly synergistic acquisition which will enhance competition in the titanium dioxide industry and benefit our customers around the world,” said Tronox CEO Jeffry Quinn. “Our combination with Cristal is an important part of our strategy to build a vertically integrated company that will deliver a low-cost, secure supply of titanium dioxide pigment to a global customer base.”
Tronox has also denied that it would try to roll back production after closing the deal. It said it would have “powerful incentives” to run its pigment plants at full capacity, regardless of competitors’ activities, and aim to safely expand production at lower costs.
Full Content: Stamford Advocate
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