RECEIVED 

AUG O 2 2019 

Clerk, U.S. District and 

Bankruptcy Courts 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

FEDERAL TRADE COMMISSION 

600 Pennsylvania Avenue, N.W. 

Washington, DC 20580 

Plaintiff, 

V. 

RAG-STIFTUNG 

Im Welterbe 10 

Essen, Germany 45141 

EVONIK INDUSTRIES AG 

Rellingshauser Strabe 1-11 

Essen, Germany 45128 

EVONIK CORPORATION 

299 Jefferson Road 

Parsippany, NJ 07054 

EVONIK INTERNATIONAL HOLDING 

B.V. 

Hettenheuvelweg 37/37 

11 0lBM Amsterdam, Netherlands 

ONE EQUITY PARTNERS SECONDARY 

FUND, L.P. and 

ONE EQUITY PARTNERS V, L.P. 

510 Madison Ave, 19th Floor 

New York, NY 10022 

LEXINGTON CAPITAL PARTNERS VII 

(AIV I), L.P. 

660 Madison Avenue, 23rd Floor 

New York, NY 10065 

Case: 1: 19-cv-02337 

Assigned To : Kelly, Timothy J. 

Assign. Date : 8/2/2019 

Description: TRO/Prelim. lnjunct. (D- DECK) 
PEROXYCHEM HOLDING COMPANY 

·· . . LLC 

PEROXYCHEM HOLDINGS, L.P. 

PEROXYCHEM HOLDINGS LLC and 

PEROXYCHEM LLC 

2005 Market Street #3200 

Philadelphia, PA 19103 

And 

PEROXYCHEM COOPERATIEF U.A. 

Herengracht 466 

1017 CA Amsterdam, Nether lands 

Defendants. 

COMPLAINT FOR TEMPORARY RESTRAINING ORDER 

AND PRELIMINARY INJUNCTION PURSUANT TO 

SECTION 13(b) OF THE FEDERAL TRADE COMMISSION ACT 

Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), by its designated 

attorneys, petitions this Court to enter a stipulated temporary restraining order and grant a 

preliminary injunction enjoining Defendants RAG-Stiftung, Evonik Industries AG, Evonik 

Corporation, and Evonik International Holding B.V., (collectively, "Evonik"), One Equity 

Partners Secondary Fund, L.P. and One Equity Partners V, L.P., (collectively, "One Equity 

Partners"), Lexington Capital Partners VII (AIV I), L.P., and PeroxyChem Holding Company 

LLC, PeroxyChem Holdings, L.P., PeroxyChem Holdings LLC, PeroxyChem LLC, and 

PeroxyChem Cooperatief U.A., (collectively, "PeroxyChem"), including their agents, divisions, 

parents, subsidiaries, affiliates, pa1tnerships, or joint ventures, from consummating their 

proposed acquisition (the "Acquisition"). Plaintiff seeks this provisional relief pursuant to 

Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b). Absent 

such provisional relief, Evonik and PeroxyChem (collectively, "Defendants") would be free to 

consummate the Acquisition after 11 :59 p.m. EDT on August 7, 2019. 

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Plaintiff requires the aid of this Court to maintain the status quo and prevent interim harm 

to competition during the pendency of an administrative proceeding on the merits. The 

Commission has already initiated that administrative proceeding pursuant to Sections 7 and 11 of 

the Clayton Act, 15 U.S.C. §§ 18, 21 , and Section 5 of the FTC Act, 15 U.S.C. § 45, by filing an 

administrative complaint on August 2, 2019. Pursuant to FTC regulations, the administrative 

hearing on the merits will begin five months from the date of that filing (i.e. , on January 2, 

2020). That administrative hearing will determine the legality of the Acquisition and will provide 

all parties a full opportunity to conduct discovery and present testimony and other evidence 

regarding the likely competitive effects of the Acquisition. 

NATURE OF THE CASE 

1. This is an action to temporarily restrain and preliminarily enjoin the 

consummation of an anticompetitive Acquisition of PeroxyChem by Evonik, two of only five 

hydrogen peroxide producers in North America. Hydrogen peroxide is a commodity chemical 

used for oxidation, sterilization, and bleaching, and for most end uses, there are no effective 

substitutes. Hydrogen peroxide producers sell to customers in various industries, including pulp 

and paper, food packaging, agriculture, chemical synthesis, mining and gas, and personal care. 

The pulp and paper industry uses most of the hydrogen peroxide produced in North America, 

primarily for bleaching pulp and deinking recycled paper. This case does not concern 

electronics-grade hydrogen peroxide, which requires additional manufacturing steps and is not a 

substitute for other forms of hydrogen peroxide. 

2. Defendants compete vigorously for customers, especially in regional markets in 

the Pacific Northwest and the Southern and Central United States. In the Pacific No1thwest, the 

Acquisition would combine two of only three significant hydrogen peroxide producers in the 

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region. In the Southern and Central United States, the Acquisition would combine the two largest 

hydrogen peroxide producers by nameplate production capacity, and two of the three largest 

hydrogen peroxide suppliers by sales. The Acquisition would create a firm with a dominant share 

and significantly increase market concentration in each regional market. 

3. Post-Acquisition, Evonik would control more than half of the market, based on 

capacity and sales, for the production and sale of hydrogen peroxide in the Pacific Northwest, 

where Solvay would be the only other hydrogen peroxide producer with a meaningful presence. 

In the Southern and Central United States, post-Acquisition, Evonik would control nearly half of 

the market, based on capacity and sales, for the production and sale of hydrogen peroxide, with 

only Solvay, Arkema, and Nouryon remaining. 

4. Under the 2010 U.S. Department of Justice and Federal Trade Commission 

Horizontal Merger Guidelines ("Merger Guidelines"), a post-acquisition market-concentration 

level above 2,500 points, as measured by the Herfindahl-Hirschman Index ("HHI"), and an 

increase in market concentration of more than 200 points renders an acquisition presumptively 

unlawful. Based on both capacity and sales, in both the Pacific Northwest and the Southern and 

Central United States, the Acquisition would significantly increase concentration in already 

concentrated markets, well beyond the thresholds set forth in the Merger Guidelines. Thus, under 

the Merger Guidelines, the Acquisition is presumptively unlawful in both the Pacific Northwest 

and the Southern and Central United States. 

5. The Acquisition would substantially lessen competition for the production and 

sale of hydrogen peroxide in at least two ways. First, the Acquisition will increase the likelihood 

of coordination in a market already vulnerable to coordination, functioning as an oligopoly, and 

with a long history of price-fixing, including guilty pleas, litigation, and substantial fines and 

4 
settlements. The hydrogen peroxide indust1y is already characterized by significant market 

transparency, strong interdependence among a few major competitors, low demand elasticity, 

and high entry barriers. Several hydrogen peroxide suppliers previously admitted to illegally 

fixing prices at a time when there were six major suppliers in North America. After the 

Acquisition, there will be only two suppliers remaining in the Pacific Northwest and four 

suppliers remaining in the Southern and Central United States. In each of the two relevant 

geographic markets, the Acquisition removes one of only a few competitors, thereby 

strengthening and reinforcing the existing oligopolistic market dynamics and making 

coordination amongst the few remaining suppliers easier. The Acquisition will thus increase the 

likelihood of coordinated effects in both the Pacific Northwest and the Southern and Central 

United States. 

6. Second, the Acquisition would eliminate significant head-to-head competition 

between Evonik and PeroxyChem in the Pacific Northwest and the Southern and Central United 

States. In both regional markets, customers benefit from head-to-head competition amongst a 

small handful of hydrogen peroxide suppliers, including the merging parties. The Acquisition 

would substantially reduce that competition. Direct competition between Evonik and 

PeroxyChem has repeatedly resulted in lower prices for customers. If consummated, the 

Acquisition threatens significant harm to hydrogen peroxide customers in both the Pacific 

Northwest and the Southern and Central United States by eliminating direct competition. 

7. New entry or expansion by existing hydrogen peroxide producers would not be 

timely, likely, or sufficient to counteract the anticompetitive effects of the Acquisition. There are 

significant barriers to entry for potential producers of hydrogen peroxide. These include the need 

for substantial capital investment and the likelihood that it would take multiple years to build a 

5 
new hydrogen peroxide production plant. These barriers make entry or expansion difficult, and 

incapable of constraining the merged entity. Expansion or repositioning by the remaining firms 

sufficient to offset the Acquisition's anticompetitive effects is also unlikely. Nor are increases in 

hydrogen peroxide imp011s or repositioning by other chemical producers likely to offset the 

anticompetitive effects of the Acquisition. 

8. No cognizable, merger-specific efficiencies would offset the likely and substantial 

competitive harm resulting from the Acquisition. 

9. On August 2, 2019, by a 4-0 vote, the Commission found reason to believe that 

the Acquisition would substantially lessen competition in violation of Section 7 of the Clayton 

Act, 15 U.S.C. § 18, and Section 5 of the FTC Act, 15 U.S.C. § 45. On the same day, the 

Commission commenced an administrative proceeding on the antitrust merits of the Acquisition 

before an Administrative Law Judge, with the merits trial scheduled to begin on January 2, 2020. 

The ongoing administrative proceeding provides a f01um for all parties to conduct discovery, 

followed by a merits trial with up to 210 hours of live testimony. See 16 C.F.R. § 3.41 (2014). 

The decision of the Administrative Law Judge is subject to appeal to the full Commission, 

which, in tum, is subject to judicial review by a United States Court of Appeals. 

10. The parties have stipulated to the Court's entry of a temporary restraining order 

preventing the parties from consummating the acquisition until the fifth business day after the 

court rules on the Commission's motion for a preliminary injunction or until after the date set by 

the District Court, whichever is later. Such a temporary restraining order is necessary to preserve 

the status quo and protect competition while the Court considers the Commission' s application 

for a preliminary injunction. 

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11. Preliminary injunctive relief is similarly necessary to preserve the status quo and 

to protect competition during the Commission's ongoing administrative proceeding. Allowing 

the Acquisition to proceed while the Commission is assessing whether the Acquisition's . 

potential anticompetitive effects would harm consumers would undermine the Commission's 

ability to remedy the anticompetitive effects of the Acquisition if it is found unlawful after a full 

trial on the merits and any subsequent appeals. 

JURISDICTION AND VENUE 

12. This Court's jurisdiction arises under Section 13(b) of the FTC Act, 15 U.S.C. § 

53(b), and under 28 U.S.C. §§ 1331, 1337, and 1345. This is a civil action arising under the Acts 

of Congress protecting trade and commerce against restraints and monopolies, and is brought by 

an agency of the United States authorized by an Act of Congress to bring this action. 

13. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), provides in pertinent pmt; 

Whenever the Commission has reason to believe -

(1) that any person, partnership, or corporation is violating, or is about to violate, any 

provision of law enforced by the Federal Trade Commission, and 

(2) that the enjoining thereof pending the issuance of a complaint by the Commission 

and until such complaint is dismissed by the Commission or set aside by the court 

on review, or until the order of the Commission made thereon has become final, 

would be in the interest of the public - the Commission by any of its attorneys 

designated by it for such purpose may bring suit in a district of the United States 

to enjoin any such act or practice. Upon a proper showing that weighing the 

equites and considering the Commission's likelihood of ultimate success, such 

action would be in the public interest, and after notice to the defendant, a 

temporary restraining order or a preliminary injunction may be granted without 

bond ... 

14. Defendants are, and at all relevant times have been, engaged in activities in or 

affecting "commerce" as defined in Section 4 of the FTC Act, 15 U.S.C. § 44, and Section 1 of 

the Clayton Act, 15 U.S.C. § 12. 

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15. Defendant PeroxyChem has expressly consented to personal jurisdiction in the 

District of Columbia. In addition, personal jurisdiction exists where service is effected pursuant 

to a federal statute. Fed. R. Civ. P. 4(k)(l)(C). The FTC Act, 15 U.S.C. § 53(b), authorizes 

nationwide service of process. Defendants are therefore subject to personal jurisdiction in the 

District of Columbia. Venue is proper in the District of Columbia under 28 U.S.C. § 1391(b) and 

(c), as well as under 15 U.S.C. § 53(b). 

THE PARTIES AND THE PROPOSED ACQUISITION 

16. Plaintiff, the Commission, is an administrative agency of the United States 

government, established, organized, and existing pursuant to the FTC Act, 15 U.S.C. §§ 41 et 

seq., with its principal offices at 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The 

Commission is vested with authority and responsibility for enforcing, inter alia, Section 7 of the 

Clayton Act, 15 U.S.C. § 18, and Section 5 of the FTC Act, 15 U.S.C. § 45. 

17. Defendant RAG-Stiftung owns Defendant Evonik Industries AG, a large 

chemicals manufacturer, headquartered in Essen, North Rhine-Westphalia, Germany. Defendant 

Evonik Corporation is a wholly owned subsidiary ofEvonik Industries AG, and is based in New 

Jersey. Defendant Evonik International Holding B.V. is a wholly owned subsidiary ofEvonik 

Industries AG, and is based in the Netherlands. In 2006, RAG-Stiftung acquired Degussa, a longtime hydrogen peroxide producer, and ultimately renamed the company Evonik. Evonik had 

worldwide revenue of €14.4 billion in 2017. Evonik has three North American hydrogen 

peroxide production plants located in Mobile, Alabama; Gibbons, Alberta; and Maitland, 

Ontario. 

18. Defendant One Equity Partners Secondary Fund, L.P. holds all of the limited 

partnership interests of Defendant One Equity Partners V, L.P. Defendant Lexington Capital 

8 
Partners VIII (AIV I), L.P. indirectly holds a majority of the limited partnership interests in One 

Equity Partners Secondary Fund, L.P. One Equity Partners is the private investment arm of J.P. 

Morgan Chase & Co., which owns Defendant PeroxyChem Holding Company LLC, a leading 

global manufacturer of several chemicals, including hydrogen peroxide based in Philadelphia, 

Pennsylvania. PeroxyChem Holding Company LLC owns Defendant PeroxyChem Holdings 

LLC, Defendant PeroxyChem Holdings, L.P., Defendant PeroxyChem LLC, and Defendant 

PeroxyChem Cooperatief. One Equity Partners acquired FMC Global Peroxygens, a long-time 

hydrogen peroxide producer, in 2014, renaming the business PeroxyChem. PeroxyChem has two 

hydrogen peroxide production plants in North America, in Bayport, Texas and Prince George, 

British Columbia. PeroxyChem also recently opened a plant in Saratoga Springs, New York. 

That plant purifies hydrogen peroxide produced at PeroxyChem's Bayport facility to create 

electronics-grade hydrogen peroxide. 

19. Pursuant to an Agreement and Plan of Merger dated November 7, 2018, Evonik 

proposes to acquire 100% of the voting securities of PeroxyChem for approximately $625 

million in cash. 

20. Pursuant to the Hart-Scott-Rodino Antitrust Improvements Act, 15 U.S.C. § 18a, 

and a timing agreement between Defendants and Commission staff, unless temporarily restrained 

and preliminarily enjoined by this Court, Defendants would be free to consummate the 

Acquisition after 11:59 p.m. on August 7, 2019. 

21 . In authorizing the filing of this complaint, the Commission has determined that 

(1) it has reason to believe the Acquisition would violate the Clayton Act and the FTC Act by 

substantially lessening competition in one or more lines of commerce, and (2) an injunction of 

the Acquisition pending the resolution of the Commission' s administrative proceedings and any 

9 
appeals will promote the public interest, so as to minimize the potential harm to customers and 

preserve the Commission's ability to grant an adequate remedy if it concludes, after the 

administrative proceeding, that the Acquisition is unlawful. 

RELEVANT MARKETS 

22. The production and sale of hydrogen peroxide to customers in (1) the Pacific 

Northwest and (2) the Southern and Central United States constitute relevant antitrust markets. 

A. Relevant Product Market 

23. The relevant product market in which to assess the effects of the Acquisition is 

hydrogen peroxide. Hydrogen peroxide is an oxidizing agent with diverse uses such as bleaching 

pulp, chemical synthesis, and sterilizing food packaging. The primary use of hydrogen peroxide 

produced in North America is for bleaching in the pulp and paper industry. 

24. The relevant product market at issue in this case does not include electronicsgrade hydrogen peroxide. Electronics-grade hydrogen peroxide is used by semiconductor 

manufacturers as a cleaning and etching agent to remove contaminants from semiconductor 

wafers that go into cell phones, computers, and other advanced electronic devices. Electronicsgrade hydrogen peroxide requires additional purification capabilities that vary by hydrogen 

peroxide producer, and not all hydrogen peroxide producers are capable of producing 

electronics-grade hydrogen peroxide. Hydrogen peroxide is not a substitute for electronics-grade 

hydrogen peroxide. 

25. Hydrogen peroxide is a commodity chemical. The primary raw materials in 

manufacturing hydrogen peroxide are natural gas and hydrogen. The hydrogen peroxide 

production process in North Ame1ica is comprised of three steps: I) hydrogenation, 2) oxidation, 

10 
and 3) extraction. This process results in crude hydrogen peroxide, which is then diluted, filtered, 

and stabilized depending on customer end-use. 

26. There are no reasonably interchangeable substitutes for hydrogen peroxide, and 

customers could not realistically switch to other chemicals in the face of a small but significant 

non-transitory increase in price. For pulp and paper customers, who purchase the majority of 

hydrogen peroxide in North America, mills are set up to use specific chemicals in the bleaching 

process. These customers could not switch to a different bleaching chemical without purchasing 

new equipment and re-formulating the bleaching process, which would be costly and could take 

several years to implement. Similarly, there are no effective substitutes for hydrogen peroxide 

for other end-use applications. 

B. Relevant Geographic Markets 

27. Defendants compete in regional markets for the production and sale of hydrogen 

peroxide to customers. Accordingly, it is appropriate to analyze the competitive effects of the 

Acquisition in certain regional markets in which Defendants compete. There is also likely to be 

harm to customers that are outside of these geographic markets. 

28. The relevant regional geographic markets in which to assess the Acquisition's 

effects are: (I) the Pacific Northwest and (2) the Southern and Central United States. 

29. Hydrogen peroxide is delivered to customers predominantly by rail or trnck. 

There are high transportation costs associated with delivering hydrogen peroxide, particularly 

relative to the value of the product itself. As a result, hydrogen peroxide producers deliver from 

plants that are relatively nearer to customers because - when all else is equal - it is more costeffective to deliver at shorter distances. While hydrogen peroxide producers use terminals to 

deliver further distances, this usage increases the cost of delivery. 

11 
30. Defendants, like the other major North American hydrogen peroxide producers, 

analyze the industry by geographic regions, routinely treating the Pacific Northwest and the 

Southern and Central United States as separate regions. 

31. Evonik and PeroxyChem individually negotiate prices with customers and price 

differently based on customers' locations. When hydrogen peroxide producers negotiate with a 

multiregional customer, the customer's prices typically vary by region. 

32. Customers within one of the relevant regional geographic markets are unlikely to 

purchase hydrogen peroxide outside of that market and transport it themselves, given the cost of 

delivery and the importance of proximity. Further, customers could not defeat a price increase by 

purchasing indirectly from or through other customers (i.e., arbitrage). 

33. Competitive conditions for the production and sale of hydrogen peroxide differ by 

region. Evonik and PeroxyChem each compete to serve customers in the Pacific Northwest and 

the Southern and Central United States, where clusters of hydrogen peroxide customers are 

located. Additionally, Evonik and PeroxyChem each have plants in the Pacific Northwest and the 

Southern and Central United States. 

34. The Pacific Northwest consists of approximately Washington, Oregon, Montana, 

Idaho, and Wyoming in the United States, along with British Columbia, Alberta, Manitoba, and 

Saskatchewan in Canada. 

35. The Southern and Central United States consists of approximately Alabama, 

Arkansas, Arizona, California, Colorado, the District of Columbia, Delaware, Florida, Georgia, 

Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, 

Mississippi, North Carolina, No11h Dakota, Nebraska, New Mexico, Nevada, Ohio, Oklahoma, 

South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and West Virginia. 

12 
THE ACQUISITION'S PRESUMPTIVE ILLEGALITY 

36. Post-Acquisition, the combined entity would have a dominant share of sales to 

customers in both the Pacific Northwest and the Southern and Central United States, and the 

Acquisition would greatly increase concentration in these already concentrated markets. 

37. Other than Evonik and PeroxyChem, only one other hydrogen peroxide producer 

has significant sales in the Pacific Northwest: Solvay. Following the Acquisition, the merged 

entity will be the largest hydrogen peroxide producer in the Pacific Northwest, with more than 

half of the production capacity and sales in the region. 

38. In the Southern and Central United States, Evonik and PeroxyChem compete with 

Solvay, Arkema, and Nouryon. By nameplate production capacity, Evonik and PeroxyChem are 

the two largest hydrogen peroxide producers, and are two of the top three suppliers of hydrogen 

peroxide by sales. Following the Acquisition, the merged entity will be the largest hydrogen 

peroxide producer in the area, with nearly half of the production capacity and sales in the region. 

39. The Merger Guidelines and courts often measure concentration using HHis. 

HHis are calculated by totaling the squares of the market shares of every firm in the relevant 

market pre- and post-Acquisition. Under the Merger Guidelines, an acquisition is presumed 

likely to create or enhance market power - and is presumptively illegal - when the postacquisition HHI exceeds 2,500 and the acquisition increases the HHI by more than 200 points. 

40. The market for hydrogen peroxide in each relevant regional market is already 

concentrated. Post-Acquisition, each regional market would be substantially more concentrated 

than it is today. 

41. In the Pacific Northwest, post-Acquisition Evonik would control more than half 

of the production capacity and sales in the relevant market. Post-Acquisition, the HHI in the 

13 
relevant market far exceeds the 2,500 points that demonstrate that a market is highly 

concentrated. Moreover, the Acquisition would increase HHis in an already highly concentrated 

market by significantly more points than required for a presumption that the Acquisition is likely 

to enhance market power. 

42. In the Southern and Central United States, post-Acquisition Evonik would control 

nearly half of the production capacity and sales in the market. Post-Acquisition, the HHI in the 

relevant market would exceed the 2,500 points that demonstrate that a market is highly 

concentrated. Moreover, the Acquisition would increase HHis in an already concentrated market 

by significantly more points than required for a presumption that the Acquisition is likely to 

enhance market power. 

43. Thus, in both relevant markets, the Acquisition would result in concentration well 

above the amount necessary to establish a presumption of competitive harm. 

44. Therefore, the Acquisition is presumptively unlawful. 

ANTICOMPETITIVE EFFECTS 

A. The Acquisition Would Increase the Likelihood of Anticompetitive Coordination 

45. The markets for the production and sale of hydrogen peroxide to customers 

already demonstrate numerous characteristics that make them vulnerable to coordinated conduct. 

These characteristics include a commodity product; a highly concentrated market structure with a 

limited number of competitors; significant transparency regarding the competitive and strategic 

decisions of rival firms; customers with long-term, stable supplier relationships allowing for easy 

detection of deviations from past practices; low elasticity of demand; and a history of strong 

interdependent behavior. 

46. Given these characteristics, it is not surprising that the industry has a history of 

price fixing, including guilty pleas, private litigation, and substantial fines and settlements. 

14 
Evonik's predecessor, Degussa, entered into an antitrust leniency agreement with the U.S. 

Department of Justice for its cooperation with a criminal antitrust investigation into illegal price 

fixing involving hydrogen peroxide. As part of the same criminal price-fixing case, Solvay and 

AkzoNobel (now Nouryon) entered plea agreements which summarized the facts underlying the 

anticompetitive behavior among the hydrogen peroxide producers: 

[Solvay] . .. participated in a conspiracy among major hydrogen peroxide producers, the 

primary purpose of which was to suppress and eliminate competition by fixing the price 

of hydrogen peroxide sold in the United States and elsewhere. In furtherance of the 

conspiracy, the defendant, through certain of its former officers, directors, and 

employees, engaged in discussions and attended meetings with representatives of other 

major hydrogen peroxide producers. During these discussions and meetings, agreements 

were reached to fix the price of hydrogen peroxide sold in the United States and 

elsewhere. 

47. The major North American hydrogen peroxide producers have considerable 

visibility into their competitors' business. Competitors track a wealth of information about each 

other- including plant-by-plant production capacities, production and.inventory levels, costs, 

and customer locations served- by monitoring public statements and gathering competitive 

information from customers, distributors, and others throughout the industry. 

48. North American hydrogen peroxide producers also have significant awareness of 

their competitors' pricing. The major costs to produce hydrogen peroxide are natural gas and 

electricity, which allows hydrogen peroxide producers to estimate production costs at competitor 

plants. Further, when responding to competitive bids, hydrogen peroxide producers factor in 

transportation costs from their competitors' hydrogen peroxide production plants. Hydrogen 

peroxide producers also learn about competitor pricing during the competitive bid process for 

customers, whether formal or informal. 

49. Having competed against each other in an oligopolistic market environment for 

many years, the major North American hydrogen peroxide producers recognize their mutual 

15 
interdependence and aligned incentives. For years, hydrogen peroxide producers have engaged in 

parallel pricing behavior and other types of parallel accommodating conduct, including 

refraining from competing aggressively to win new business for fear of provoking a competitive 

response from a rival. By eliminating a key competitor, the Acquisition may exacerbate the 

anticompetitive effects of this interdependence. 

50. Allowing Evonik to acquire PeroxyChem will increase the likelihood of 

anticompetitive coordination by eliminating a large, independent competitor. In the Pacific 

Northwest, the Acquisition creates a duopoly, leaving Evonik and Solvay as the only hydrogen 

peroxide producers remaining in the region. In the Southern and Central United States, the 

Acquisition establishes a firm controlling nearly half of the production capacity and sales in the 

region. Previous industry conduct demonstrates that hydrogen peroxide producers were 

successfully able to fix prices with six firms competing in North America. The Acquisition 

would reduce the number ofremaining finns to two in the Pacific Northwest and four in the 

Southern and Central United States, making coordination among the remaining finns both easier 

and more likely to increase. 

B. The Acquisition Would Eliminate Vital Head-to-Head Competition Between Evonik 

and PeroxyChem 

51. The Acquisition would eliminate significant direct, head-to-head competition 

between Defendants. Customers benefit substantially from the competition between Evonik and 

PeroxyChem in the form of lower prices. The Acquisition would substantially reduce that 

competition. 

52. Evonik and PeroxyChem compete for customers in both the Pacific Northwest 

and the Southern and Central United States, to the direct benefit of customers. Evonik and 

PeroxyChem track rival firms' price movements and respond to competition by offering better 

16 
prices. This competition enables customers to pit hydrogen peroxide producers against each 

other in negotiations to obtain lower prices and increased discounts. Customers benefit from 

having more hydrogen peroxide producers in the region from which to obtain competitive 

pricing. 

53. Post-Acquisition, Evonik would face less meaningful competition in both regional 

markets than it does today. Evonik would not need to compete as aggressively on price to win or 

retain the business of many customers. Other hydrogen peroxide producers will be unable to 

make up for the competition lost as a result of the Acquisition. 

54. The only remaining hydrogen peroxide producer with a significant presence in the 

Pacific Northwest is Solvay. Customers in the Pacific Northwest are often unwilling to use 

hydrogen peroxide producers with plants outside the Pacific Northwest-Arkema and 

Nouryon-<lue to their distance from customer locations, which results in higher delivered prices 

and an increased risk of supply issues. Further, Arkema and Nouryon generally do not bid on 

customers' business in the Pacific Northwest. 

55. The only remaining hydrogen peroxide producers in the Southern and Central 

United States are Solvay, Arkema, and Nouryon. However, post-Acquisition, Evonik would 

control nearly half of the production capacity and sales in the region. Solvay, Arkema, and 

Nouryon do not have sufficient capacity to mitigate the anticompetitive effects of the Acquisition 

in the Southern and Central United States. Further, for certain customers, some of these suppliers 

are not viable options due to smaller production capacities. 

LACK OF COUNTERVAILING FACTORS 

56. Defendants cannot demonstrate that new entry or expansion by existing firms 

would be timely, likely, or sufficient to offset the anticompetitive effects of the Acquisition. 

17 
57. The hydrogen peroxide market is characterized by substantial barriers to entry. 

Building a new hydrogen peroxide plant would take multiple years and a large capital 

investment. Thus, sufficiently timely entry is unlikely to occur in response to the Acquisition's 

anticompetitive effects in the Pacific Northwest or the Southern and Central United States to 

prevent significant anticompetitive harm. 

58. Expansion or repositioning by the remaining firms that would defeat 

anticompetitive effects in the hydrogen peroxide markets in the Pacific No11hwest or the 

Southern and Central United States is also unlikely. While Solvay expanded production of 

hydrogen peroxide at its Longview, Washington plant in 2016, there has been no other 

substantial increase in hydrogen peroxide capacity in the last decade. Further, any expansion 

would require a large capital investment. Thus, expansion would not be timely, likely, or 

sufficient in the Pacific Northwest or the Southern and Central United States to counteract the 

anticompetitive effects of the Acquisition. 

59. Other industrial chemical producers are unlikely to reposition. The same barriers 

to entry and expansion by existing hydrogen peroxide producers hold true for industrial chemical 

manufacturers. 

60. There are no significant imports of hydrogen peroxide into North America, and 

North American hydrogen peroxide producers do not view imports as a competitive threat. 

Further, customers do not view impo11s as a viable option for hydrogen peroxide due to supply 

chain challenges and transportation costs. 

61 . Defendants cannot demonstrate cognizable, merger-specific efficiencies that 

would be sufficient to rebut the strong presumption and evidence of the Acquisition's likely 

significant anticompetitive effects in the relevant markets. 

18 
LIKELIHOOD OF SUCCESS ON THE MERITS, 

BALANCE OF EQUITIES, AND NEED FOR RELIEF 

62. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), authorizes the Commission, 

whenever it has reason to believe that a proposed acquisition is unlawful, to seek preliminary 

injunctive relief to prevent consummation of the acquisition until the Commission has had an 

opportunity to adjudicate the acquisition's legality in an administrative proceeding. In deciding 

whether to grant relief, the Court must balance the likelihood of the Commission's ultimate 

success on the merits against the public equities. The principal public equity weighing in favor of 

issuance of preliminary injunctive relief is the public interest in effective enforcement of the 

antitrust laws. Private equities affecting only Defendants' interest cannot defeat a preliminary 

injunction. 

63. The Commission is likely to succeed in proving that the effect of the Acquisition 

may be substantially to lessen competition or tend to create a monopoly in violation of Section 7 

of the Clayton Act, 15 U.S.C. § 18, or Section 5 of the FTC Act, 15 U.S.C. § 45. In particular, 

the Commission is likely to succeed in demonstrating, among other things, that: 

a. The Acquisition is likely to have anticompetitive effects in the relevant 

regional geographic markets for the production and sale of hydrogen peroxide; 

b. Substantial and effective entry or expansion in these markets is difficult and 

would not be timely, likely, or sufficient to offset the anticompetitive effects 

of the Acquisition; and 

c. The efficiencies asserted by Defendants are insufficient as a matter of law to 

justify the Acquisition. 

64. Preliminary relief is wan-anted and necessary. Should the Commission rnle, after 

the full administrative proceeding, that the Acquisition is unlawful, reestablishing the status quo 

19 
of vigorous competition between Evonik and PeroxyChem would be difficult, if not impossible, 

if the Acquisition has already occurred in the absence of preliminary relief. Moreover, in the / 

absence of relief from this Court, it~·eversible harm to competition would likely occur in the 

interim, even if suitable divestiture remedies were obtained later. 

65. Accordingly, the equitable relief requested here is in the public interest. The 

Commission respectfully requests that the Court: 

1. Enter the parties' stipulated temporary restraining order and preliminarily 

enjoin Defendants from taking any further steps to consummate the 

Acquisition, or any other acquisition of stock, assets, or other interests of one 

another, either directly or indirectly; 

2. Retain jurisdiction and maintain the status quo until the administrative 

proceeding that the Commission has initiated is concluded; and 

3. Award such other and further relief as the Court may determine is appropriate, 

just, and proper. 

20 
Dated: August 2, 2019 

Of counsel: 

D. BRUCE HOFFMAN 

(D.C. Bar 495385) 

Director 

Federal Trade Commission 

Bureau of Competition 

GAIL LEVINE 

(D.C. Bar 454727) 

Deputy Director 

Federal Trade Commission 

Bureau of Competition 

CHARLES A. LOUGHLIN 

(D.C. 448219) 

Chief Trial Counsel 

Federal Trade Commission 

Bureau of Competition 

DOMINIC VOTE 

(D.C. Bar 985637) 

Assistant Director 

Federal Trade Commission 

Bureau of Competition 

Mergers II Division 

AMY DOBRZYNSKI 

MICHAEL BLEVINS 

STEVEN A. DAHM 

FRANCES ANNE JOHNSON 

MICHAEL LOVINGER (D.C. Bar 990801) 

DANIEL MATHESON (D.C. Bar 502490) 

Z. LILY RUDY (D.C. Bar 1023073) 

STEPHEN SANTULLI (D.C. Bar 1617916) 

CECELIA WALDECK (D.C. Bar 443969) 

Attorneys 

Federal Trade Commission 

Bureau of Competition 

Mergers II Division 

Respectfully Submitted, 

(D.C. Bar 4-12 2 S"S'" 

Deputy Assistant Director 

Federal Trade Commission 

Bureau of Competition 

Mergers II Division 

400 Seventh Street, S.W. 

Washington, DC 20024 

Telephone: (202) 326-2871 

Facsimile: (202) 326-2286 

Email: jrhilinger@ftc.gov 

Attorney for Plaintiff Federal Trade 

Commission 

21 
CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on the 2nd day of August, 2019, I served the foregoing on the 

following counsel via electronic mail: 

Eric Mahr 

Freshfields Bruckhaus Deringer US LLP 

700 13th Street, NW 

10th Floor 

Washington, DC 20005-3960 

Tel: (202) 777-4545 

Email: eric.mahr@freshfields.com 

Counsel for Defendants RA G-Stiftung, Evonik 

Industries AG, Evonik Corporation, and 

Evonik International Holding B. V. 

Mike Cowie 

James Fishkin 

Dechert LLP 

1900 K St, NW 

Washington, DC 20006 

Tel: (202) 261-3339 

Email: mike.cowie@dechert.com 

Counsel for Defendants One Equity Partners 

Secondary Fund, L.P., One Equity Partners V, 

L.P., Lexington Capital Partners VII (AIV I), 

L.P., PeroxyChem Holding Company LLC, 

PeroxyChem Holdings, L.P., PeroxyChem 

Holdings LLC, PeroxyChem LLC, and 

PeroxyChem Cooperatief U.A. 

Attorney for Plaintiff Federal Trade Commission 

22