Canadian Manufacturing

U.S. tries to block Canexus-Superior Plus merger

The United States claims the merger of two Canadian chemical companies would violate antitrust laws


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

Canexus 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 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 per cent 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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