EC approves Tronox's acquisition of Cristal, subject to conditions
Staff Writer |
The European Commission (EC) has approved under the EU Merger Regulation the acquisition of Cristal by Tronox, both major suppliers of titanium dioxide pigment.
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The approval is conditional on full compliance with commitments offered by Tronox.
Tronox and Cristal are both active in the production of titanium dioxide pigment. They also own titanium feedstock mines, which provide the input material for pigment production, and sell zircon as a by-product of the mining.
Titanium dioxide pigment, which is manufactured through either a chloride or a sulphate based production process, is used to whiten and opacify a wide range of consumer products, including paints, plastics and paper. Zircon is used in the production of tiles, ceramics and fire bricks.
The Commission carried out an in-depth review of the proposed acquisition and found that the takeover, as initially notified, would have significantly reduced competition on the European market for chloride-based titanium dioxide pigment for use in paper laminate.
Tronox and Cristal are currently two of only four major suppliers of this product, the others being Chemours and Kronos. The acquisition would therefore have led to a reduction in choice and, potentially, to price increases.
To address the Commission's competition concerns, Tronox offered to sell its global business in titanium dioxide pigment for paper laminate comprising the required technology and other intangibles to an experienced manufacturer with chloride-based production technology active in the European Economic Area (EEA).
The acquisition of Cristal is subject to the Commission approving the buyer that Tronox will propose. In its assessment the Commission will consider the proposed buyer's suitability and incentive to compete in a way that would replicate the current competitive dynamic on the market where the Commission found competition concerns.
These commitments fully address the Commission's concerns as they ensure that the same number of suppliers will remain active on the market of chloride-based titanium dioxide pigment for paper laminate, and that customers continue to enjoy the same level of choice.
The Commission therefore considers that the proposed transaction, as modified by the commitments, would no longer raise competition concerns. The Commission's decision is conditional upon full compliance with the commitments.
Tronox, registered in Australia and headquartered in the US, is active in mining and in the production of minerals and chemicals, including titanium dioxide. It owns mines in Australia and South Africa, and operates production sites in Europe, the US and Australia.
Cristal (The National Titanium Dioxide Company Ltd.) is headquartered in Saudi Arabia and is part of the Tasnee industrial company.
Cristal is active in mining and in the production of titanium dioxide and other titanium chemicals.
It owns mines in Australia and Brazil, and operates production sites in Europe, the US, China, Brazil and Saudi Arabia. ■