BRUSSELS--The European Union's competition regulator on
Wednesday said it had opened an in-depth investigation into
Huntsman Corp.'s (HUN) acquisition of the titanium dioxide assets
of chemical maker Rockwood Holdings Inc. (ROC).
Announced last year, the $1.1 billion cash deal would make
Huntsman the second-largest global producer of titanium dioxide and
inorganic color pigments for uses in paints and industrial
coatings.
The European Commission said it has concerns that the
transaction may reduce competition in the market for sulphate-based
titanium dioxide in the European Economic Area, which comprises EU
member states and the three EFTA states of Iceland, Liechtenstein,
and Norway.
Rockwood's performance additives and titanium dioxide businesses
include the manufacture and supply of sulphate process titanium
dioxide, synthetic iron oxide and other organic pigments, timber
treatment products and specialty automotive materials. These
businesses had combined net sales of $1.45 billion in 2012,
Rockwood said. These products are used in coatings, construction,
concrete, plastics, papers, inks, food, cosmetics, pharmaceuticals,
fibers and films.
The total size of Europe's titanium dioxide market is around 3
billion euros ($4.1 billion). The commission's preliminary
investigation showed that the proposed transaction would raise
competition concerns in this market.
"At this stage, the Commission has concerns that the remaining
competitors may not be able to exert sufficiently strong
competitive constraint on the merged entity in specialty markets
using sulphate-based titanium dioxide," the commission said.
The commission will now investigate the effects of this
transaction to determine whether its initial concerns are borne
out.
Write to Frances Robinson at Frances.Robinson@wsj.com
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