The US Federal Trade Commission is seeking to block Evonik’s proposed US$625 million acquisition of PeroxyChem in the belief that the deal will lead to price hikes, according to a report published by Reuters.
The German specialty chemicals manufacturer said in a press release that it intends to ‘vigorously defend itself’ against the action. The deal, which was struck at the close of 2018 between Evonik and One Equity Partners, was expected to close around now but will now be delayed until at least the end of the year.
“It is disappointing that the FTC has taken this step to block the acquisition in the highly competitive hydrogen peroxide industry,” said Christian Kullmann, chairman of the executive board of Evonik. “PeroxyChem offers products in attractive and high-growth end markets that are complementary to Evonik’s product portfolio. The transaction represents an opportunity for Evonik to expand further into specialty hydrogen peroxide and peracetic acid product, optimize its distribution network, achieve substantial efficiencies, and grow production and sales. We remain optimistic that we will prevail at trial and complete the acquisition.”
“We continue to believe that the complementary fit of the two businesses will unlock new and attractive growth opportunities for our customers and employees,” said Bruce Lerner, President and CEO of PeroxyChem.
The companies intend to show the court that the FTC’s claims fail to recognize current market dynamics or the significant synergies and customer benefits that will arise as a result of the transaction.