OFT Refers Acquisition By Dorf Ketal Chemicals Of Johnson Matthey Unit

Date : 11/19/2010 @ 10:40AM
Source : Dow Jones News
Stock : Johnson Matthey (JMAT)
Quote : 3157.0  -20.0 (-0.63%) @ 8:41AM
Johnson Matthey share price Chart

OFT Refers Acquisition By Dorf Ketal Chemicals Of Johnson Matthey Unit

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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.


-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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