Metallurgy firms abandon merger during CMA investigation
The CMA no longer intends to refer the merger of metallurgy firms TTI and Tronox to an in-depth investigation, after Tronox’s announcement to abandon the deal.
Tronox and TiZir Titanium and Iron (TTI) are involved in the supply of materials used in the production of titanium dioxide, a white powder used in every-day items such as paint, sunscreen, paper and plastics.
TTI is one of the tqo main global suppliers of chloride slag, one of the most important minerals used to make titanium dioxide pigment, and Tronox is one of the main producers of titanium dioxide pigment.
In its initial Phase 1 investigation, the Competition and Markets Authority (CMA) found that Tronox intends to use all of TTI’s chloride slag in its own production of titanium dioxide and halt future sales of chloride slag to third parties. This would leave Rio Tinto, TTI’s main chloride slag competitor, with what is effectively a monopoly position.
The CMA found that the removal of TTI as a main competitor from the market could significantly limit customer supply and lead to higher prices for chloride slag globally, as well as for titanium dioxide in the UK and Europe. Although other minerals are available to make titanium dioxide, the CMA found that customers have limited substitutes for chloride slag.
The CMA subsequently announced it would proceed to refer the deal to an in-depth Phase 2 investigation as undertakings offered by Tronox were not a clear-cut solution to the competition concerns identified. The CMA will now not refer the deal for an in-depth Phase 2 investigation, subject to appropriate assurances from the parties that the transaction has been abandoned.