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UPDATE 2-U.S. challenges deal to merge Canada's Superior Plus, Canexus

Published 2016-06-27, 05:11 p/m
© Reuters. UPDATE 2-U.S. challenges deal to merge Canada's Superior Plus, Canexus
CUS
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SPB
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(Adds comments from companies, Canadian competition authority,
share price moves)
WASHINGTON, June 27 (Reuters) - U.S. antitrust regulators
filed a complaint on Monday to block the proposed merger of
Canadian chemical companies Superior Plus Corp SPB.TO and
Canexus Corp CUS.TO .
The U.S. Federal Trade Commission said in a statement that
the companies are among three major North American producers of
sodium chlorate, a chemical used to whiten wood pulp for making
paper.
Either company can pull out of the deal as of June 29 under
the agreement, Superior said. Discussions to potentially extend
that date are ongoing, they said in separate statements.
"Superior is confident that it has a strong case and remains
prepared to present a vigorous defense," the company said.
On the Toronto stock exchange, Superior slipped 1.2 percent
to C$10.25 and Canexus fell 2.3 percent to C$1.30.
Toronto-based Superior said in October that it would buy
chemicals and handling company Canexus Corp, based in Alberta,
as it looked to expand its specialty chemicals portfolio.

The FTC valued the deal at $982 million.
Canexus owns sodium chlorate and chlor-alkali plants in
Canada and Brazil.
Superior said in a statement last week that it anticipated
potential litigation even though it had offered to sell assets
that would reduce the company's U.S. market share to 35 percent.
Canada's Competition Bureau is aware of the FTC action,
spokeswoman Sophie Paluck-Bastien said in an email. She noted
that the deal is also subject to a review by the bureau, but
declined to comment further, citing confidentiality rules.

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