FTC tries blocking merger of two Canadian chemical firms

US trade body claims it would violate antitrust laws by reducing competition for sodium chlorate.

June 28, 2016   by CP STAFF

CALGARY — The US Federal Trade Commission has filed a complaint aimed at blocking the planned merger of two Canadian chemical companies on the grounds it would allegedly violate American anti-trust laws.

Canexus Corp. says the FTC has authorized staff to seek a temporary restraining order in federal court and a preliminary injunction to prevent it from closing the deal with Toronto-based Superior Plus Corp. pending the proceeding.

The FTC says the proposed merger it values at US$982 million would violate antitrust laws by significantly reducing competition in the North American market for sodium chlorate – a chemical used to bleach wood pulp that processed into paper, tissue, diaper liners and other products.

The American agency says Superior and Calgary-based Canexus are two of the three major producers of sodium chlorate in North America.


If the merger takes place, says the FTC, the new company and rival AkzoNobel would control about 80% of the sodium chlorate capacity in North America. The complaint alleges that there are no viable substitutes for sodium chlorate in the pulp bleaching process and there are “no meaningful imports to compete against the North American producers.”

The FTC complaint further alleges that the merger would likely to lead to anti-competitive reductions in output and higher prices.

Canexus – which has four plants in Canada and two more at one site in Brazil – says it and Superior Plus are holding discussions to possibly extend the outside date of the merger agreement of June 29 to allow time for Superior to litigate the FTC action.

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