The OFT has announced it is to refer to the Competition Commission the acquisition of the titanate and zirconate business of Johnson Matthey plc (JM business) by Dorf Ketal Chemicals AG (Dorf). Dorf and JM are the two largest UK suppliers of titanate and zirconate (chemicals used for the production of inks, sealants and coatings) and they both operate on a global scale. The referral of this acquisition to the Competition Commission is the third referral by the OFT in 2010.
The OFT received a significant number of third party concerns about the merger and due to the high level of competition between the parties and the high barriers to entry for other suppliers, the OFT is concerned that in the absence of competition from the JM business there would be insufficient post merger constraints on Dorf which would prevent Dorf raising prices and/or altering its quality, range or services.
Given the relatively small combined size of the relevant markets in the UK, the application of the de minimis exception was considered by the OFT, but ruled out due to the potential for significant harm to consumers outweighing the costs of an investigation by the Competition Commission. A response is expected from the Competition Commission by the 5 May 2011.
121/10 - 19 November 2010