US Tronox sues antitrust regulator over Cristal deal

Author: Al Greenwood


HOUSTON (ICIS)--Pigment producer Tronox sued a US antitrust regulator on Tuesday, alleging that it had no legitimate reason to block its proposal to acquire National Titanium Dioxide (Cristal).

Tronox announced the $2.4bn deal in February 2017. The combination would create the world's largest and most highly integrated producer of titanium dioxide (TiO2), the company said.

In December, the US Federal Trade Commission (FTC) filed an administrative complaint, alleging that the Cristal acquisition would reduce competition for chloride-based TiO2.

Tronox disagreed, alleging that the Cristal acquisition would allow it to produce even more TiO2, allowing it to make more pigment available to customers around the world.

Such a deal would actually benefit consumers, Tronox said.

Moreover, the FTC is attempting to block the acquisition by challenging it through time-consuming administrative proceedings, Tronox alleged. Typically, the FTC would file litigation in a federal court.

By relying on such an administrative complaint, Tronox alleged that the FTC is trying to delay the pending acquisition until the purchase agreement expires on 21 May 2018.

"Instead of filing a lawsuit in federal court to enjoin the transaction as it has routinely done in the past, the FTC is engaged in a cynical strategy of delay," Tronox said in the lawsuit. "The FTC's approach would run out the clock instead of resolving the legality of the Tronox-Cristal transaction on the merits."

Such a strategy would never give Tronox a chance to defend the legality of the Cristal acquisition, the company said.

Tronox wants the court to declare that the FTC failed to act on the pending acquisition in a reasonable amount of time. If the FTC wants to block the acquisition, it needs to do so by seeking a preliminary injunction from the court by 15 February. That would give Tronox a chance to defend the acquisition.

If the FTC does not seek the injunction by then, the court should prevent the regulator from seeking any kind of injunctive relief to block the Cristal deal, Tronox said.

Even if the FTC sought such an injunction, Tronox questions whether the regulator would prevail. With that, Tronox also wants the court to decide whether the FTC could successfully seek an injunction against the deal. If the court finds that the FTC would fail, then that would remove any legal impediments that would prevent Tronox from closing its acquisition of Cristal.

Tronox filed the lawsuit in US District Court, Northern Mississippi District. The case number is 18-00010.