04/10/2019 | Press release | Distributed by Public on 04/10/2019 12:50
Tronox Limited and Cristal, two of the largest suppliers of the white pigment chloride process titanium dioxide, have agreed to settle Federal Trade Commission charges by divesting Cristal's North American titanium dioxide assets, thereby preserving competition in the market for this important and widely used compound.
The settlement comes after the FTC won key victories before a federal court and an Administrative Law Judge in its case to block the transaction. Chloride process titanium dioxide (TiO2) is used in a wide variety of products, including paint, industrial coatings, plastic, and paper. Under the settlement, Tronox and Cristal will sell the divested assets to Ineos, a multinational chemical manufacturer, no later than 30 days from the close of the acquisition.
'TiO2 is an ingredient in many products used by consumers,' said Bureau of Competition Director Bruce Hoffman. 'This agreement will preserve a competitive marketplace, which ultimately benefits consumers in the form of lower prices and higher quality products.'
The proposed settlement would end 16 months of litigation over the proposed transaction. In December 2017, the FTC filed an administrative complaint, alleging that Tronox's acquisition of Cristal, for $1.67 billion and a 24 percent stake in the combined entity, would violate the antitrust laws by significantly reducing competition in the North American market (comprising the United States and Canada) for chloride process TiO2. The FTC also alleged in the complaint that the acquisition, if consummated, would increase the risk of coordinated action among the remaining competitors and would increase the likelihood of future anticompetitive output reductions by Tronox.
In September 2018, the FTC successfully obtained a preliminary injunction from the U.S. District Court for the District of Columbia, which prevented the parties from consummating the proposed acquisition before the Administrative Law Judge issued a decision in the matter. The ALJ issued an initial decision in December 2018, finding the proposed acquisition unlawful. The ALJ found that the proposed acquisition would have increased the likelihood of anticompetitive coordination among chloride process TiO2 suppliers in North America and would have increased Tronox's unilateral incentive and ability to curtail production of chloride process TiO2 in North America. The matter was on appeal before the Commission, but was recently withdrawn from adjudication to consider a settlement.
Under the proposed order, Tronox and Cristal would be required to:
The Commission vote to accept the proposed consent order for public comment was 5-0. The consent agreement package will be published in the Federal Register soon. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.
NOTE: When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $42,530.
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