US judge finds Tronox Cristal tie up would hit TiO2 competition

By William Clarke
Published: Thursday, 20 December 2018

A planned takeover of Cristal has stalled after a judge found competition will lessen if the deal goes ahead.

A judge in the United States has found that the proposed acquisition of Cristal by rival titanium dioxide producer Tronox could "substantially lessen" competition in the North American chloride-route titanium dioxide market, raising the possibility that the takeover will be blocked.

Tronox on December 10 announced the receipt of an initial decision from the Federal Trade Commission’s administrative law judge. The decision was based on the fact that a merged Cristal and Tronox would control a large portion of North America’s chloride-route TiO2 production, with little material available for import from other markets.

The decision by the judge forces Tronox to offer remedies to this reduction in competition, possibly in the form of divestments. 

Tronox has already offered to sell its Ashtabula TiO2 operation in Ohio to a rival producer. A planned divestiture to Venator fell through in November but on December 4 a deal was struck with INEOS to take over the plant.

"We look forward to working with the FTC staff on the proposed remedy," Tronox chief executive Jeffry Quinn said.

Prices for titanium dioxide have remained steady in the US, despite easing in Europe and China. In part this is due to a 10% tariff in place on US imports of Chinese material, as well as sustained demand from buyers.

Fastmarkets IM assessed the price of titanium dioxide pigment, bulk volume, cif US, at $2,900-3,400 per tonne on December 6, unchanged year on year.