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FTC says Evonik, PeroxyChem merger will hinder competition in parts of US

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FTC says Evonik, PeroxyChem merger will hinder competition in parts of US

The U.S. Federal Trade Commission blocked the proposed $625 million acquisition of PeroxyChem LLC by Evonik Industries AG on the grounds that the merger would allegedly reduce competition in the production and sale of hydrogen peroxide in the Pacific Northwest and the Southern and Central parts of the U.S.

The FTC has issued a complaint and requested for a temporary restraining order to block the merger of the two producers of hydrogen peroxide, a chemical used for oxidation, disinfection, bleaching, and to sterilize food and beverage packaging.

The merger allegedly violates the Federal Trade Commission Act and the Clayton Act. An administrative trial on the complaint is scheduled to begin Jan. 22, 2020, the FTC said.

In its complaint, the FTC said the hydrogen peroxide market already has limited competition with a history of price-fixing and has low demand and long-term stable customer-supplier relationships, which would hinder the progress of competitors.

With the merger, the new company would have only one competitor in the Pacific Northwest and three in Southern and Central US, and the buyers would see an increase in prices, the complaint alleges.