Polyurethane foam producers FXI Holdings, Inc. and Innocor, Inc. have agreed to divest polyurethane foam pouring plants in three regional markets to Future Foam, Inc., to settle Federal Trade Commission charges that FXI’s proposed $850 million acquisition of Innocor would violate federal antitrust law.
The FTC alleges that the combination of FXI and Innocor would substantially lessen competition for low-density conventional polyurethane foam used in home furnishings in three regional markets: the Pacific Northwest (Oregon and Washington); the Midwest states of Indiana, Michigan, and Ohio; and Mississippi.
The complaint states that regional markets are appropriate because low-density foam is bulky and expensive to ship, relative to the value of the product. FXI and Innocor are the only suppliers in the Pacific Northwest, two of three major suppliers in the Midwest states, and two of four major suppliers in Mississippi, according to the complaint.
The complaint alleges that without a remedy, the proposed acquisition would eliminate direct and substantial competition between FXI and Innocor and would increase the likelihood of coordinated interaction among the remaining competitors in each regional market.
Full Content: CNMC
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