OFT Refers Acquisition By Dorf Ketal Chemicals Of Johnson Matthey Unit
November 19 2010 - 10:40AM
Dow Jones News
The Office of Fair Trading, or OFT, said Friday it referred the
anticipated acquisition by Dorf Ketal Chemicals AG of the titanate
and zirconate business of Johnson Matthey PLC (JMAT.LN) to the
Competition Commission for further investigation.
MAIN FACTS:
-Dorf and the Johnson Matthey Business are the two largest
suppliers of titanate and zirconate in the U.K., as well as on a
European and global basis.
-The OFT is concerned that the proposed merger would enable Dorf
to increase prices and/or decrease quality, range and service to
customers as a result of the loss of competition.
-During its investigation, the OFT received a significant number
of submissions from third parties, supporting the view that there
is a substantial degree of competition between Dorf and the Johnson
Matthey Business.
-OFT considered carefully whether there would be sufficient
constraints on Dorf from existing rival suppliers and/or new
entrants into the market.
-However, the evidence available indicated that barriers to
entry in the U.K. are high and existing suppliers will have
significant difficulty competing with the merged entity, and
therefore there remains a realistic prospect of a substantial
lessening of competition.
-Johnson Matthey shares at 1505 GMT down 1.21% at 1874 pence
valuing the company at GBP4.03 billion.
-By Jana Weigand, Dow Jones Newswires; 44-20-7842-9314;
jana.weigand@dowjones.com
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