On Wednesday, September 5, a US judge granted the Federal Trade Commission (FTC) a preliminary injunction blocking chemical maker Tronox’s pending acquisition of Saudi Arabian peer Cristal’s titanium dioxide business.
The FTC, which filed a complaint in July, first objected to the deal last year, claiming the merger would reduce competition in the market.
Tronox and Cristal are two of the three top suppliers of chloride process titanium dioxide, used to make paint, plastic, paper and other products, Reuters wrote.
“The Court’s ruling temporarily blocking Tronox’s proposed acquisition of Cristal is good news for North American customers of chloride process titanium dioxide, including paint and plastics manufacturers. We believe the proposed acquisition would significantly reduce competition for customers in the United States, and we look forward to a positive resolution of the administrative trial on the merits. That trial concluded on June 22, 2018, and post-trial briefing will end shortly, after which Administrative Law Judge D. Michael Chappell will issue an initial decision,” said FTC Bureau of Competition Director Bruce Hoffman in a statement.
Tronox responded that it intends to promptly file a notice of appeal and request an expedited hearing of its appeal to reverse the Court’s decision so Tronox may proceed with the merger. Simultaneous to its pursuit of an appeal, Tronox will be considering whether to proceed with the remedial divestiture of Cristal’s Ashtabula, Ohio, two-plant titanium dioxide production complex.
“Tronox is disappointed by the US District Court’s decision to further delay this output-enhancing combination designed to increase the supply of TiO2 for North American customers and position Tronox to succeed in a fiercely competitive global market,” said Jeffry Quinn, President and CEO of Tronox.