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THE LITIGATOR

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The Litigator
AGM :: Affleck Greene McMurtry LLP

THE LITIGATOR

Affleck Greene McMurtry LLP
365 Bay Street, Suite 200  ·  Toronto, Canada
416 360 2800  ·  info@agmlawyers.com  ·  www.thelitigator.ca

Canadian chemical merger abandoned after FTC challenge

Paper Mill

The Superior-Canexus merger would have raised prices for chemicals used by pulp and mills

Superior Plus Corp. abandoned plans to buy rival chemical manufacturer Canexus after the US challenged the merger.

Both the FTC and the Canadian Bureau concluded that the merger would harm competition. The Bureau ruled that the merger would be saved by efficiency gains and gave the parties the go-ahead. In the US, where efficiencies are treated differently, the FTC filed an complaint challenging the merger.

Toronto-based Superior and Calgary-based Canexus produce chemicals for the pulp and paper industry. The Bureau concluded that their merger would substantially lessen competition for the supply sodium chlorate and several other chemicals used principally by the pulp and paper industry, but also by a variety of other industries. Due to the minimal presence of foreign imports, the merger would raise prices for customers of Superior and Canexus, the Bureau found.

The FTC focused on sodium chlorate, a chemical used to bleach wood pulp. Superior and Canexus are two of only three major North American producers of sodium chlorate. Superior/Canexus would control more than half of North American post-merger, and, with their rival AkzoNobel, they would enjoy over 80% of the market.

The Bureau concluded that the efficiencies generated by the merger would “clearly” outweigh its anti-competitive effects. In Canada, unlike the US, this provides a complete for an anti-competitive merger under the Competition Act, the Bureau issued a Letter indicating it would not challenge the merger.

 

 

 

W. Michael G. Osborne
LLP

W. Michael G. Osborne

Michael Osborne is a former Partner of Affleck Greene McMurtry LLP

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