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EC opens in-depth investigation into proposed acquisition of Cristal by Tronox

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Staff Writer | December 21, 2017
The European Commission (EC) has opened an in-depth investigation to assess the proposed takeover of Cristal by Tronox under the EU Merger Regulation.
Tronox Limited
Acquisition   Titanium dioxide is used in everyday products
The Commission is concerned that the deal may reduce competition in titanium dioxide pigment, a critical input for many consumer products.

Commissioner Margrethe Vestager, responsible for competition policy, said: "Titanium dioxide is used in everyday products, including paints, plastics and paper, and many different manufacturers need to buy it from a small number of suppliers.

"We will carefully assess whether the proposed merger between Cristal and Tronox would affect competition in the titanium dioxide market and ultimately lead to higher prices for many everyday products, or less choice for consumers.”

Tronox and Cristal are both active in manufacturing titanium dioxide pigment. They also own titanium feedstock facilities, from which they source the raw material for their pigment production. Titanium dioxide is a white pigment used in numerous products, such as paints, paper and plastics. It is used to add opacity and brightness, and to ensure consistency of colour.

The proposed merger would create the largest supplier of chloride-based titanium dioxide in the European Economic Area (EEA) and globally.

The Commission's initial market investigation raised several issues relating in particular to a reduction in the number of suppliers of titanium dioxide pigment produced via the chloride-based process.

The market is already concentrated and Tronox and Cristal are close competitors. The Commission is concerned that the transaction could lead to less choice for customers and potentially to higher prices for the products concerned.

Different types of titanium dioxide pigment are suitable for use in different products.

For some of them, such as paints for buildings and specific types of plastics and paper, the number of suppliers of titanium dioxide is particularly limited. In some of these markets, the Commission is concerned that the acquisition would reduce the number of effective competitors from four to three.

The Commission will now carry out an in-depth investigation into the effects of this transaction to further explore its initial concerns.

The transaction was notified to the Commission on 15 November 2017. The Commission now has 90 working days, until 15 May 2018, to take a decision.

The opening of an in-depth investigation does not prejudge the outcome of the investigation.