Chemicals giant Tronox has been dealt a second new year blow after 海角视频 competition authorities called in the proposed buy-out of a supply chain business.
The titanium dioxide producer - reeling from the naming of its chief executive in a US insider trading investigation which has led to him taking a leave of absence - now faces a probe into the acquisition of TiZir Titanium ad Iron from French multinational Eramet SA.
The £246 million deal for the Norwegian smelting asset was agreed in May last year, but the Competition and Markets Authority has now indicated that it intends to open a Phase Two investigation.
It centres on taking all production of chloride slag in-house - leaving only Rio Tinto as an open market producer in "what is effectively a monopoly position".
Andrea Gomes da Silva, the CMA’s executive director for mergers and markets, said: "Our investigation showed that Tronox’s purchase of TTI removes a key player in the global supply of chloride slag which, in turn, could have a knock-on effect on the creation of titanium dioxide pigment.
"Any deal that leaves one company as the only significant supplier in a market deserves closer scrutiny and, in this case, the acquisition could leave buyers and their customers facing higher prices."
Tronox has been given the opportunity to offer remedies ahead of it commencing.
A spokesperson said: “The transaction did not require notification in the United Kingdom or meet pre-merger reporting thresholds in the United States; however, the CMA and the Federal Trade Commission each launched investigations into the transaction, and the company has been co-operative throughout these reviews.”
Most Read
It follows a long legal battle to get the acquisition of Cristal over the line, which brought with it the sprawling site in Stallingborough - Tronox’s largest European operation.
The whitening pigment manufacturer has a strong vertical integration strategy with mining assets around the globe.
Located in Tyssedal, south west of Bergen, TiZir upgrades ilmenite to produce high-grade titanium slag and high-purity pig iron with an annual capacity of approximately 320,000 tonnes across both.
At the time of the deal being agreed, Jeffry N Quinn - now standing aside as the civil and criminal investigation into a share deal involving a former directorship position at Ferro Corporation in which he is not the defendant runs its course - said: “This highly strategic acquisition represents the next step in advancing our vertical integration strategy, providing Tronox with increased titanium feedstock capacity to better fulfill our internal requirements, and in turn, better serve our pigment customers with a low-cost, secure source of supply.
“The site is ideally situated to supply feedstock to our European pigment facilities.
“The technology and manufacturing capabilities acquired will lower our cost of obtaining the feedstocks we need to run our pigment plants.
“TTI is a great complement to Tronox because of a shared focus on operational excellence, safety and sustainability. We are excited about the opportunities created by the addition of this well-established, high-quality asset to the Tronox portfolio.”