Brussels, 06/03/2014 (Agence Europe) - On Wednesday 5 March, the European Commission opened an in-depth investigation to assess whether the planned acquisition by Huntsman (of the United States) of a number of equity interests held by Rockwood (of the US) is in line with the EU Merger Regulation. The Commission has concerns that the transaction may reduce competition in the market for sulphate-based titanium dioxide. Titanium dioxide is a chemical used for as a whitening agent.
The Commission says that “the proposed transaction would raise competition concerns in this market, and more particularly in applications using sulphate-based titanium dioxide where Huntsman and Sachtleben (Rockwood Group) are the two leading suppliers worldwide and compete closely”. The Commission fears that competition may be reduced in this sector, with a more limited choice and higher prices for consumers.
The total size of the EEA titanium dioxide market is around €3 billion. Titanium dioxide is a used as a pigment and to add opacity. It is found it toothpaste and confectionery, as well as in paint and medicines. The decision to open an in-depth inquiry does not prejudge the result of the investigation.
Huntsman produces a wide range of speciality and intermediate chemicals worldwide and aims to become the world's second-biggest titanium dioxide producer by buying up Rockwood Holdings' titanium dioxide and functional additives division.
Huntsman is planning to spend US$1.1 billion in cash and to finance the pension funds for the businesses it hopes to acquire, which will cost a further US$225 million. The two parties hope to seal the deal by the end of June. The Commission now has 90 days, until 22 July 2014, to take a decision. (LC)