1710085 

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS: Maureen Ohlhausen, Acting Chairman

Terrell McSweeny

In the Matter of

Docket No. 9377 

REDACTED PUBLIC VERSION 

Tronox Limited

a corporation, 

National Industrialization Company 

(TASNEE) 

a corporation, 

National Titanium Dioxide Company 

Limited (Cristal)

a corporation,

And

Cristal USA Inc. 

a corporation.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act (“FTC Act”), and by 

virtue of the authority vested in it by the FTC Act, the Federal Trade Commission 

(“Commission”) having reason to believe that Respondents Tronox Limited (“Tronox”) and 

National Titanium Dioxide Company Limited (“Cristal”) have executed a merger agreement in 

violation of Section 5 of the FTC Act, 15 U.S.C. § 45, which if consummated would violate 

Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, and it 

appearing to the Commission that a proceeding by it in respect thereof would be in the public 

interest, hereby issues its complaint pursuant to Section 5(b) of the FTC Act, 15 U.S.C. § 45(b), 

and Section 11(b) of the Clayton Act, 15 U.S.C. § 21(b), stating its charges as follows: 

I. NATURE OF THE CASE

1. Tronox’s proposed acquisition of Cristal (the “Acquisition”) would combine two

of the three largest producers of titanium dioxide (“TiO2”) manufactured through the chloride 

process (“chloride TiO2”) in the United States and Canada (“North America”). TiO2 is an 

industrial chemical primarily used as a pigment to provide white color and opacity for 

architectural paints, industrial and automotive coatings, plastics, and other products. TiO2 is 
2

manufactured using either the chloride process, which comprises the vast majority of TiO2 

produced and purchased in North America, or the sulfate process (“sulfate TiO2”). 

2. The U.S. Court of Appeals for the Third Circuit recently characterized the TiO2

industry as an “oligopoly” that is “dominated by a handful of firms” with “substantial barriers to 

entry.” Absent injunctive relief, two firms, Tronox and The Chemours Company (“Chemours”), 

would control the vast majority of chloride TiO2 sales to North American customers and more 

than 80 percent of overall North American chloride TiO2 manufacturing capacity. The proposed 

Acquisition would substantially increase concentration in an already concentrated market and

would result in post-Acquisition market concentration levels for the sale of chloride TiO2 to 

North American customers that exceed those presumed likely to result in anticompetitive effects 

under both the Federal Trade Commission and U.S. Department of Justice Horizontal Merger 

Guidelines (“Merger Guidelines”) and the relevant case law.

3. The Acquisition would substantially lessen competition in the North American 

market for chloride TiO2 in at least two ways. First, the Acquisition would increase the 

likelihood of coordination in an already vulnerable oligopoly market with an extensive history of 

price-fixing litigation and settlements. It removes one of only a few remaining competitors; 

consolidates the overwhelming majority of North American chloride TiO2 sales and production 

capacity in the hands of two large and disciplined TiO2 companies, Tronox and Chemours; and 

enhances market transparency among the competitors that remain. Second, by doubling the size 

of Tronox’s North American chloride TiO2 business, the Acquisition would increase the 

incentive and ability of Tronox—a company long focused on reducing or restricting supply as a 

means of stabilizing or propping up TiO2 prices—to discipline its output to influence North 

American chloride TiO2 supply and increase prices. 

4. Following the announcement of the Acquisition in February 2017, market 

participants and observers recognized the potential anticompetitive impact of the Acquisition. 

Industry publication ICIS Chemical Business observed that “Tronox’s proposed acquisition of 

Cristal is the latest example of market consolidation that should lead to more price discipline in 

titanium dioxide.” Indeed, Tronox acknowledges that the Acquisition will prove beneficial to its 

competitors and the industry as a whole. Shortly after the transaction was announced, Tronox’s 

then-CEO wrote to competitor Huntsman’s CEO stating that “I am very happy that we are able to 

put [the Acquisition] together since I think it will be very good for [Tronox’s] shareholders – and 

if today’s market reaction is an indication, for yours, and Chemour’s and Kronos’ too.” Other 

major TiO2 producers similarly acknowledged in investor presentations that the Acquisition is 

likely to lead to increased supply constraints and higher prices. 

5. New entry or expansion by existing producers would not be timely, likely, or 

sufficient to counteract the anticompetitive effects of the Acquisition. In public statements, 

Tronox and other market participants consistently confirm the Third Circuit’s conclusion that the 

TiO2 industry is characterized by “substantial barriers to entry.” Proprietary technology and the 

massive investment required render de novo entry in the North American chloride TiO2 market 

unlikely. As Tronox noted during an earnings call, “running TiO2 plants is a capital-intensive 

undertaking” and mastering “complex, proprietary technology” remains a “major hurdle,” 

particularly for chloride TiO2 plants. Expansion or repositioning by the remaining firms 
3

sufficient to offset the Acquisition’s anticompetitive effects is also unlikely. Over the last 

decade, more North American TiO2 production capacity has been removed through plant and 

line closures than added by expansions. Nor are increases in TiO2 imports or other adjustments 

in global TiO2 trade flows likely to offset the anticompetitive effects of the Acquisition. 

6. Respondents cannot show cognizable efficiencies that would offset the likely and 

substantial competitive harm from the Acquisition. 

II. JURISDICTION AND VENUE

7. Respondents 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. 

8. The Acquisition constitutes an acquisition subject to Section 7 of the Clayton Act, 

15 U.S.C. § 18. 

III. RESPONDENTS 

9. Tronox is a publicly traded company incorporated in Australia and headquartered 

in Stamford, Connecticut. Tronox is a vertically integrated company that mines titanium ore and 

other minerals and manufactures and sells chloride TiO2 pigment. In 2016, Tronox’s TiO2

business generated North American sales of approximately $410 million. Tronox operates one 

TiO2 pigment manufacturing plant in Hamilton, Mississippi, and two other plants in Botlek, the 

Netherlands, and Kwinana, Australia. All three plants produce exclusively chloride TiO2. 

Tronox also operates titanium feedstock facilities, including mines and mineral processing 

plants, in South Africa and Australia that provide the raw materials needed to produce TiO2 

pigment. 

10. TASNEE is a Saudi joint stock company headquartered in Riyadh, Saudi Arabia. 

It is the majority owner of Cristal and the ultimate parent entity of Cristal USA, Inc. TASNEE is 

the legal entity that filed, along with Tronox, a Premerger Notification and Report Form with the 

FTC and the Department of Justice for the Acquisition—pursuant to the Hart-Scott-Rodino 

Antitrust Improvement Act of 1976, 15 U.S.C. § 18a—and responded to the Request for 

Additional Information and Documentary Material from the FTC. Since a recent restructuring, 

TASNEE, through its Titanium Strategic Business Unit, has consistently supervised and 

intervened in the affairs of Cristal and Cristal USA.

11. Cristal, headquartered in Jeddah, Saudi Arabia, is a privately held company, 

owned 79% by TASNEE, 20% by Gulf Investment Corporation, and 1% by a private investor. 

Cristal USA is an agent and alter ego of Cristal. In 2016, Cristal, which produces and sells TiO2, 

generated North American TiO2 sales of approximately $300 million. Cristal produces TiO2 in

Ashtabula, Ohio, and in the United Kingdom, Australia, Saudi Arabia, Brazil, China, and France. 

All of Cristal’s TiO2 production in North America, and 80% of its TiO2 production overall, is 

chloride TiO2. Cristal’s remaining TiO2 production is sulfate TiO2. Cristal also owns titanium 
4

feedstock facilities in Australia, Brazil, and Saudi Arabia. Cristal is a named party to the 

Acquisition agreement. 

14. TiO2 

12. Cristal USA Inc., a Delaware corporation, operates a large chloride TiO2 

manufacturing complex in Ashtabula, Ohio, and a research facility outside Baltimore, Maryland. 

Cristal USA’s management, including strategy, sales and marketing, is fully integrated into the 

management and operation of Cristal.

IV. THE ACQUISITION

13. Pursuant to a February 21, 2017 agreement, Tronox seeks to acquire Cristal’s 

TiO2 business for $1.67 billion in cash and a 24% stake in the combined entity. 

V. BACKGROUND

A. Titanium Dioxide 

is an essential pigment used to add whiteness, brightness, and opacity to 

paints, industrial and automotive coatings, plastics, and other specialty products. Primary 

customers include paint and coatings manufacturers and plastic producers, which account for 

approximately 60% and 25% of the TiO2 consumed in North America, respectively. Paper and 

other specialty products, such as ink, food, cosmetics, and pharmaceuticals, use the remainder. 

For nearly all customers, there are no commercially reasonable substitutes for TiO2. 

15. TiO2 is produced from titanium-containing ore through one of two manufacturing 

processes that extract the TiO2 from the ore: (1) the chloride process that uses chlorine; and (2) 

the sulfate process that uses sulfuric acid. The chloride process is environmentally cleaner but 

technically more difficult to master and operate. The chloride process also generally produces 

higher quality TiO2 with a bluer tint, compared to a yellower tint for TiO2 manufactured from 

the sulfate process. Chloride TiO2 is also more durable than sulfate TiO2. The vast majority of 

TiO2 sold to and consumed by North American customers, as well as produced in North 

America, is chloride TiO2. 

16. TiO2 can also have two different crystal structures—rutile and anatase. Each has 

very different physical characteristics and applications and are not substitutes for each other for 

any use relevant to this matter. References in this Complaint to TiO2 are to rutile TiO2. 

17. TiO2 is delivered to customers by rail or truck. In North America, customers 

purchase TiO2 either in a slurry form or a bagged dry powder form. TiO2 slurry is made by 

dispersing TiO2 powder in water with other additives. TiO2 slurry is then delivered by rail cars 

or tank trucks and pumped directly to customers’ storage tanks, which simplifies handling and 

manufacturing. TiO2 slurry demand is much higher in North America than in other regions. 

Large paint and coatings manufacturers in North America generally purchase the majority of 

their TiO2 in a slurry form while smaller coatings producers and plastics producers typically 

purchase TiO2 in a bagged dry powder form. North American slurry is entirely made from

chloride TiO2. 
5

B. Market Participants and Industry Dynamics

18. The North American TiO2 industry is an oligopoly dominated by five major 

producers: Tronox, Cristal, Chemours, Kronos, and Venator. These companies produce and sell 

TiO2 both in North America and in other regions. All North American production is chloride 

TiO2 with the exception of a small Kronos-owned sulfate TiO2 plant in Canada. 

19. Chemours, a DuPont spin-off, is currently the largest TiO2 company in North 

America and globally. Chemours has two plants in the United States, one in DeLisle, 

Mississippi and the other in New Johnsonville, Tennessee. Chemours also has plants in Mexico 

and Asia. Chemours’ plants produce only chloride TiO2. 

20. The two other major North American TiO2 companies—Kronos and Venator—

jointly own a 50-50 joint venture that operates a chloride TiO2 plant in Westlake, Louisiana. 

Kronos also operates a TiO2 plant in Canada and four plants in Europe. Venator, a Huntsman 

spin-off, operates six TiO2 plants in Europe and one plant in Asia. While Venator is the second 

largest TiO2 company in the world by capacity, its presence in North America—limited to half 

of the output of the joint venture plant in Louisiana—is the smallest among the five major North 

American producers. Outside of the United States, Kronos and Venator produce both chloride 

TiO2 (rutile) and sulfate TiO2 (rutile and anatase). 

21. Beyond the major North American TiO2 producers, there are smaller regional 

manufacturers of TiO2, primarily located in Eastern Europe and Asia. The TiO2 produced by 

these fringe manufacturers is virtually all sulfate TiO2, is generally lower quality than that

manufactured by the five major TiO2 companies, and is mostly sold in local or regional markets

outside North America. Over the last decade, producers in China have increased their exports of 

TiO2, primarily into markets in Asia, South America, Europe, and the Middle East. Almost all 

Chinese TiO2 has been lower quality sulfate TiO2, and very little has been exported to North 

America. Similarly, although a few Chinese manufacturers have recently begun producing 

chloride TiO2, their production has been limited, and only a very small amount has been 

imported to North America. 

22. Over the past several years, there have been several civil antitrust suits brought in 

the United States alleging price fixing by the five major TiO2 companies. Most recently, the 

Third Circuit Court of Appeals concluded that “[t]here is little doubt that this highly concentrated 

market for a commodity-like product with no viable substitutes and substantial barriers to entry 

was conducive to price fixing.” The Court went on to state that the major TiO2 companies have 

already engaged in anticompetitive conduct, noting that “the market was primed for 

anticompetitive interdependence and that it operated in that manner,” and that such “oligopolistic 

conscious parallelism is by nature anticompetitive.” In a separate proceeding, in 2013, a federal 

district court in Maryland denied summary judgment for defendants, holding that “[t]he record 

contains ample evidence for concluding that the Defendants agreed to raise prices and shared 

commercially sensitive information . . . to facilitate their conspiracy.” That litigation concluded 

with the defendants paying a significant settlement. 
6

23. Given relatively inelastic demand for chloride TiO2, the major North American 

TiO2 producers recognize that by limiting the supply of chloride TiO2 available in North 

America they are better able to stabilize or increase North American TiO2 prices. Several of 

these companies have curtailed or restricted their North American chloride TiO2 output over the 

past several years to prop up prices. Tronox publicly stated in an earnings call that it manages or 

restricts production to support higher TiO2 pricing and believes that the other major producers 

have done the same. Tronox and major North American chloride TiO2 producers have curtailed

output by temporarily idling production lines, lowering production rates, or permanently closing

plants. They have also allowed chloride TiO2 inventory to build up, exported North American 

production, and slowed or delayed production increases in an effort to increase or maintain 

higher prices. 

 

 

24. In recent years, Tronox and Chemours have been particularly disciplined about 

their North American sales and production of TiO2. In 2015, Tronox reduced production at its 

Hamilton, Mississippi facility by temporarily shutting down a line, and Chemours closed its 

Edge Moor plant in Delaware and shut down a production line at its New Johnsonville, 

Tennessee plant. 

VI. RELEVANT MARKETS

25. The sale of chloride TiO2 to North American customers is a relevant market. A 

hypothetical monopolist for the sale of chloride TiO2 to North American customers would find it 

profit-maximizing to impose at least a small but significant and non-transitory increase in price 

(“SSNIP”). Virtually all TiO2 customers have no viable substitutes for TiO2. While various 

products and technologies can be used to reduce the amount of TiO2 used by small percentages, 

they have limited applications and can degrade product performance.

A. Relevant Product Markets

26. The sale of chloride TiO2 is a relevant product market. TiO2 produced through 

the chloride process comprises the vast majority of TiO2 sold, consumed, and produced in North 

America. Most North American customers purchasing chloride TiO2, including virtually all of 

the largest customers, strongly prefer and buy chloride TiO2 for its distinct characteristics, 

including its brighter tint and improved coverage and durability. Tronox stated during an 

earnings call that major North American TiO2 customers’ “ability to substitute sulfate for 

chloride [ ] is limited by their need to maintain the quality levels of their own products.” Cristal 

recognizes that 

 

27. In order to switch to sulfate TiO2, North American customers currently 

purchasing chloride TiO2, including almost all coatings and plastics manufacturers, would need 

to reformulate their product lines and complete extensive testing to qualify the sulfate TiO2, a 

process that would be costly and could take several years to complete. Consequently, despite 

significantly higher chloride TiO2 prices in recent years, North American customers switching 

away from chloride to sulfate TiO2 has been limited. As Tronox’s then-CEO told investors, 

“95%-98%, or some very, very high number [is] chloride in North America,” and “that was true 
7

when [chloride] prices were over $4,000 per ton,” substantially higher than sulfate prices at that 

time. 

28. In addition to the TiO2 differences due to the manufacturing process, TiO2 also 

has two distinct crystal forms—rutile and anatase—that also impart different product 

characteristics to the TiO2 and make them suitable for different end uses. Rutile TiO2’s crystal 

structure creates a pigment that is durable, opaque, bright, and very white. Given these 

characteristics, rutile TiO2 is used in architectural paints, industrial and automotive coatings, and 

plastics. Rutile TiO2 can be produced using either the chloride or sulfate process. Because all 

chloride TiO2 has a rutile crystal form, rutile TiO2 comprises the vast majority of the 

commercially available TiO2 in North America. In contrast, anatase TiO2 is softer and less 

abrasive than rutile TiO2, and is used for certain specialty applications such as ink, food, 

cosmetics, and pharmaceuticals. Anatase TiO2 can only be manufactured through the sulfate 

process. Because of these performance differences, North American customers purchasing rutile 

TiO2 do not consider anatase TiO2 to be a substitute for rutile TiO2, nor does the supply of 

anatase TiO2 constrain rutile TiO2 prices. Accordingly, the sale of rutile TiO2 also constitutes a 

relevant product market in which to consider the effects of the Acquisition. 

29. The relevant competitive dynamics in the North American rutile TiO2 market are 

substantially similar to those in the North American chloride TiO2 market. As a result, the 

Acquisition’s harmful impact on competition in a rutile TiO2 market would be substantially 

similar to the competitive harm likely to occur in the chloride TiO2 market. 

B. Relevant Geographic Market

30. The relevant geographic market in which to assess the Acquisition’s effects is the 

sale of the relevant products to North American customers. A hypothetical monopolist supplier 

of the relevant products to North American customers would find it profit-maximizing to impose 

at least a SSNIP.

31. Tronox and Cristal, like the other major North American TiO2 producers, analyze 

the industry by geographic regions—consistently treating North America as its own region—and 

engage in price discrimination, including by setting different prices for each geographic region. 

This reflects the market reality that supply and demand dynamics vary by region. For example, 

Tronox noted during an earnings call that there are “different prices in the regional markets in 

which [Tronox] do[es] business.” 

32. When TiO2 producers negotiate with a multinational customer, the customer’s 

prices typically vary by region. For example, a Tronox sales executive reacted to a customer’s 

attempt to leverage lower pricing in one region to obtain a price reduction in another by 

commenting that the customer

 
8

33. Competitive conditions differ by region, and TiO2 producers employ different 

pricing strategies for sales in the North American market than in other parts of the world. As a 

result, North American purchasers of TiO2 face different prices and terms than other regions. 

Over the past several years, North American prices and margins have generally been higher and 

more stable than other regions. 

 

34. Beyond pricing differences, North American purchasers of TiO2 also have a 

number of distinct demand characteristics compared to TiO2 purchasers in other regions. For 

example, most North American customers buy and strongly favor chloride TiO2 for the vast 

majority of applications. In contrast, customer demand in other regions of the world is more split 

between sulfate and chloride. Shifting from chloride to sulfate TiO2 is not commercially 

feasible for most North American customers. Notably, after acquiring a sulfate TiO2 plant in 

2000, Tronox’s predecessor company closed it a few years later, specifically citing lack of North 

American demand for sulfate TiO2. Another demand characteristic largely unique to North 

America is North American customers’ preference for TiO2 sold in slurry form. The vast 

majority of TiO2 sold in slurry form is consumed in North America by the large North American 

paint and coatings manufacturers. 

35. North American customers facing a SSNIP from a hypothetical monopolist 

supplier of the relevant products would not be able to defeat the price increase through arbitrage

(i.e., by purchasing TiO2 outside of North America and shipping it to North America). Import 

duties, shipping and handling costs, and other logistical challenges would render such efforts 

both uneconomical and impractical. 

36. Imported chloride or sulfate TiO2 from China or other countries does not 

meaningfully constrain prices to North American customers. As Tronox noted during an 

earnings call in 2015, “[w]e do not see that exports from China or from Europe are playing a 

material role in the competitive balance in the North American market.” 

VII. MARKET STRUCTURE AND THE ACQUISITION’S PRESUMPTIVE 

ILLEGALITY

37. Post-Acquisition, each of the relevant markets would be highly concentrated and 

would become significantly more concentrated as a result of the Acquisition. 

38. The federal antitrust agencies, consistent with the Merger Guidelines and courts, 

measure concentration using the Herfindahl-Hirschman Index (“HHI”). The HHI is calculated 

by totaling the squares of the market shares of each firm in the relevant market. Under the 

Merger Guidelines, a merger is presumed likely to create or enhance market power—and is 

presumptively illegal—when the post-merger HHI exceeds 2,500 and the merger increases the 

HHI by more than 200 points. 
9

39. In the market for the sale of chloride TiO2 to North American customers (“North 

American chloride TiO2 market”), the Acquisition would result in a post-Acquisition HHI 

exceeding 3,000, with an increase in the HHI of more than 700. Thus, the Acquisition would 

result in concentration that establishes a presumption of competitive harm in the North American 

chloride TiO2 market. 

40. In the market for the sale of rutile TiO2 to North American customers (“North 

American rutile TiO2 market”), the Acquisition would result in a post-Acquisition HHI 

exceeding 2,500, with an increase in the HHI of more than 550. Thus, the Acquisition would 

result in concentration that establishes a presumption of competitive harm in the North American 

rutile TiO2 market. 

41. Therefore, the Acquisition is presumptively unlawful under relevant case law and 

the Merger Guidelines.

VIII. ANTICOMPETITIVE EFFECTS 

A. The Acquisition Would Increase the Likelihood of Anticompetitive Coordination

42. As the Third Circuit and the District Court in Maryland have observed, the TiO2 

industry is “primed for anticompetitive interdependence” and “a text book example of an industry 

susceptible to efforts to maintain supracompetitive prices.” This Acquisition would only 

exacerbate these market conditions, rendering anticompetitive coordination even more likely. 

43. The North American chloride TiO2 industry already has a number of 

characteristics that make it vulnerable to coordination. Those include a commodity-like product; 

a highly concentrated market with limited competitors; significant transparency into 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. Given those characteristics, it is not 

surprising that the industry has a history of price fixing allegations and settlements. Allowing 

Tronox to acquire Cristal would enhance that vulnerability and substantially increase the 

likelihood of anticompetitive coordination by eliminating a large, independent competitor and by 

placing more than 80% of North American TiO2 capacity in the hands of the two most 

disciplined competitors—Tronox and Chemours. 

44. The major North American chloride TiO2 companies have considerable visibility

into their competitors’ businesses. Competitors track a wealth of information about each other—

including plant-by-plant production capacities, costs, and strategic plans—by monitoring public 

statements such as earnings calls made by the other publicly traded TiO2 companies, gathering 

competitive information from customers, and by relying on insight provided by Wall Street 

analysts and industry consulting firms such as TZ Minerals International Pty Ltd. (“TZMI”). 
10

45. North American chloride TiO2 companies also have a strong awareness of their 

competitors’ pricing. They all issue customer pricing letters and several make public price 

announcements. Moreover, because many customers have “meet or release” clauses in their 

contracts, customers often relay competitors’ customer-specific pricing information to their TiO2 

suppliers. 

46. This transparency will only grow with the Acquisition. Today Cristal, unlike the 

other major North American TiO2 companies, is not a publicly traded company and discloses 

less detail about its operations. By incorporating Cristal’s entire TiO2 production into Tronox, 

the Acquisition would not only eliminate an important competitor, it would also make 

information regarding Cristal’s operations significantly more accessible to the remaining North 

American TiO2 companies. Thus, the Acquisition would further enhance the likelihood for 

coordination by, among other aspects, increasing market transparency among the remaining 

competitors and making coordination easier to maintain. 

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

many years, the major North American TiO2 companies have recognized their mutual 

interdependence and aligned incentives. Tronox, along with the other publicly traded North 

American TiO2 producers, openly discuss these market dynamics during their public earnings 

calls. For example, during an earnings call in 2016, Tronox’s then-CEO explained the industry’s 

strategy to manage production to drive TiO2 prices higher as follows: “I can tell you that . . . last 

year, Huntsman, . . . Cristal, Chemours, and we all lowered our plant utilization rates. And we 

all talked about declining inventories which we had set as a goal. That is that we wanted to 

reduce inventories, clearly the way that one reduces inventories is one reduced production and 

continues to maintain sales which is what we have all tried to do.” By eliminating a key 

competitor, especially an opaque one like Cristal, the Acquisition will exacerbate the 

anticompetitive effects of this interdependence. 

48. Parallel pricing behavior has been commonplace in the North American chloride 

TiO2 market for years. The Third Circuit identified 31 separate instances of parallel price 

increase announcements over an eleven-year period, concluding that such “oligopolistic 

conscious parallelism is by nature anticompetitive.” The District of Maryland described the 

pattern of parallel price increases in the TiO2 industry as “pervasive.” 

49. Additionally, Tronox and Cristal engage in other types of parallel accommodating 

conduct among North American TiO2 competitors, including refraining from competing 

aggressively to win a new contract or more business for fear of provoking a competitive response 

from a rival. As a Tronox sales executive instructed a subordinate when declining to bid on a 

potential account in 2016,

Likewise, Tronox’s then-CEO explained 

during an earnings call in 2014 that “[Tronox] ha[s] not gained market share by trying to reduce 

price. We don’t think that’s the appropriate strategy going forward. Although obviously, we’re 

competitors, so we compete where we have to. But it’s not a price-driven market share 

accretion.” 
11

 In a February 2016 presentation to Cristal, consulting firm McKinsey concluded that 

 The Acquisition is likely to increase the level of

anticompetitive conscious parallelism in the North American chloride TiO2 market, resulting in

higher chloride TiO2 prices for consumers. 

B. The Acquisition Would Increase Tronox’s Incentive and Ability to Curtail Output

50. Tronox has consistently acknowledged the tight link between North American 

chloride TiO2 prices and North American production. In a 2015 earnings call, Tronox’s thenCEO stated that “by managing our production, so that inventories get reduced to normal or below 

normal levels; and when that happens, prices will rise.” Indeed, Tronox built its 2016 budget 

based on 

 And Tronox reaffirmed its commitment 

to this strategy even after agreeing to purchase Cristal, stating that

Allowing Tronox to acquire Cristal, thereby doubling its size in 

North America, will increase Tronox’s incentive and ability to decrease or restrict output 

intended for North American customers, thus leading to higher prices. 

51. Tronox has a history of seeking to support North American chloride TiO2 prices 

by curtailing output in North America. These efforts include reducing production of both 

chloride TiO2 pigment and titanium feedstock—the input material that Tronox also 

manufactures as a vertically integrated producer. Over the past several years, Tronox has closed

titanium feedstock facilities and shut down TiO2 pigment production lines. In 2015, Tronox’s 

then-CEO publically stated that “[i]t is our view that an upward move in [TiO2 pigment] selling 

prices will be predicated on a reduction of supply in the pigment market relative to demand, 

and/or an upward move in feedstock selling prices and we expect to see both.” That year, 

Tronox cut its TiO2 pigment production by approximately 15% and suspended operation of one 

of its titanium feedstock facilities. 

52. In addition to North American production cuts, Tronox and the other major North 

American chloride TiO2 producers have also reduced North American supply in other ways in 

order to support the region’s pricing. This includes temporarily building up inventory and 

increasing exports of North American production, despite lower prices abroad. Latin America is 

a common destination, and a 2015 Cristal report observed that

 

53. The Acquisition would make Tronox the largest TiO2 producer in the world and 

double its TiO2 production capacity in North America. The combined firm, with its larger size, 

would have a stronger incentive to curtail output in order to support higher prices. Also, with 

more manufacturing facilities at its disposal, post-Acquisition Tronox would have more ability to 

increase North American chloride TiO2 prices by curtailing its production. 
12

54. Consistent with Merger Guidelines Section 6.3, this Acquisition is likely to 

incentivize the combined firm to engage in output curtailment because:

• the combined firm would have a relatively high market share (the merger doubles

Tronox’s North American market share); 

• the combined firm would have relatively little output already committed at prices 

unaffected by the output curtailment (contract volume is allocated each year and prices 

are generally negotiated quarterly);

• the margin on the curtailed output would be relatively low (the margin on the lost 

chloride TiO2 sales would be small relative to those retained);

• the supply responses of rivals would be relatively small (entry and expansion is slow, 

expensive, and unlikely); and 

• the market elasticity of demand for chloride TiO2 is low (chloride TiO2 is an essential 

input for many products meaning that a small reduction in output results in a large price 

effect). 

IX. LACK OF COUNTERVAILING FACTORS

55. Respondents cannot demonstrate that new entry or expansion by existing firms 

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

56. The TiO2 industry is characterized by substantial barriers to entry. Building a 

new TiO2 plant would take multiple years and a large capital investment, and is unlikely to occur 

in response to an increase in North American chloride TiO2 prices post-Acquisition. Expansion 

or repositioning by the remaining firms that would defeat anticompetitive effects in the North 

American TiO2 market is also unlikely. During the last decade, substantially more TiO2 

production capacity in North America has been taken out because of plant or line closures by 

Tronox, Cristal, and Chemours than added by expansions. 

57. TiO2 imports into North America, mostly sulfate TiO2, manufactured by smaller

TiO2 companies, primarily from China, are limited and unlikely to provide a meaningful

competitive restraint in the near future. In 2016, Chinese TiO2 imports accounted for less than 

1% of North American chloride TiO2 sales and less than 8% of North American rutile TiO2

sales. In their public statements, the major North American TiO2 companies have repeatedly 

minimized the significance of the competitive threat posed by Chinese TiO2 imports into North 

America. In 2016, Tronox stated that it does not view Chinese TiO2 as a competitive alternative 

to its product because of the inferior quality of the Chinese imports. Moreover, because of

increased environmental enforcement by the Chinese government over the last two years, many 

sulfate TiO2 plants in China have been permanently or temporarily shut down. Those closures, 

coupled with rising domestic demand in China and elsewhere in Asia, have resulted in very tight 

TiO2 supply in China and recent prices that are even higher than those in North America. As a 
13

2016 Tronox document observes,

 

Consequently, Chinese exports to North America are unlikely to increase substantially for the 

foreseeable future. 

58. Respondents also cannot demonstrate cognizable efficiencies that would be 

sufficient to rebut the strong presumption and evidence that the Acquisition likely would 

substantially lessen competition in the North American chloride TiO2 market and in the North 

American rutile TiO2 market. 

X. VIOLATION

Count I—Illegal Agreement

59. The allegations of Paragraphs 1 through 58 above are incorporated by reference as 

though fully set forth. 

60. The Acquisition Agreement constitutes an unfair method of competition in 

violation of Section 5 of the FTC Act, as amended, 15 U.S.C. § 45. 

Count II—Illegal Acquisition

61. The allegations of Paragraphs 1 through 58 above are incorporated by reference as 

though fully set forth. 

62. The Acquisition, if consummated, may substantially lessen competition in the 

relevant markets in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and is 

an unfair method of competition in violation of Section 5 of the FTC Act, as amended, 15 U.S.C. 

§ 45. 

NOTICE

Notice is hereby given to the Respondents that the eighth day of May, 2018, at 10 a.m., is 

hereby fixed as the time, and the Federal Trade Commission offices at 600 Pennsylvania 

Avenue, N.W., Room 532, Washington, D.C. 20580, as the place, when and where an 

evidentiary hearing will be had before an Administrative Law Judge of the Federal Trade 

Commission, on the charges set forth in this complaint, at which time and place you will have 

the right under the Federal Trade Commission Act and the Clayton Act to appear and show cause 

why an order should not be entered requiring you to cease and desist from the violations of law 

charged in the complaint. 

You are notified that this administrative proceeding shall be conducted as though the 

Commission, in an ancillary proceeding, has also filed a complaint in a United States District 

Court, seeking relief pursuant to Section 13(b) of the Federal Trade Commission Act, 15 U.S.C. 

53(b), as provided by Commission Rule 3.11(b)(4), 16 CFR 3.11(b)(4). You are also notified 

that the opportunity is afforded you to file with the Commission an answer to this complaint on 
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or before the fourteenth (14th) day after service of it upon you. An answer in which the 

allegations of the complaint are contested shall contain a concise statement of the facts 

constituting each ground of defense; and specific admission, denial, or explanation of each fact 

alleged in the complaint or, if you are without knowledge thereof, a statement to that effect. 

Allegations of the complaint not thus answered shall be deemed to have been admitted. If you 

elect not to contest the allegations of fact set forth in the complaint, the answer shall consist of a 

statement that you admit all of the material facts to be true. Such an answer shall constitute a 

waiver of hearings as to the facts alleged in the complaint and, together with the complaint, will 

provide a record basis on which the Commission shall issue a final decision containing 

appropriate findings and conclusions and a final order disposing of the proceeding. In such 

answer, you may, however, reserve the right to submit proposed findings and conclusions under 

Rule 3.46 of the Commission’s Rules of Practice for Adjudicative Proceedings.

Failure to file an answer within the time above provided shall be deemed to constitute a 

waiver of your right to appear and to contest the allegations of the complaint and shall authorize 

the Commission, without further notice to you, to find the facts to be as alleged in the complaint 

and to enter a final decision containing appropriate findings and conclusions, and a final order 

disposing of the proceeding.

The Administrative Law Judge shall hold a prehearing scheduling conference not later 

than ten (10) days after the Respondents file their answers. Unless otherwise directed by the 

Administrative Law Judge, the scheduling conference and further proceedings will take place at 

the Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Room 532, Washington, D.C. 

20580. Rule 3.21(a) requires a meeting of the parties’ counsel as early as practicable before the 

pre-hearing scheduling conference (but in any event no later than five (5) days after the 

Respondents file their answers). Rule 3.31(b) obligates counsel for each party, within five 

(5) days of receiving the Respondents’ answers, to make certain initial disclosures without 

awaiting a discovery request.

NOTICE OF CONTEMPLATED RELIEF

Should the Commission conclude from the record developed in any adjudicative 

proceedings in this matter that the Merger challenged in this proceeding violates Section 5 of the 

Federal Trade Commission Act, as amended, and/or Section 7 of the Clayton Act, as amended, 

the Commission may order such relief against Respondents as is supported by the record and is 

necessary and appropriate, including, but not limited to:

1. If the Acquisition is consummated, divestiture or reconstitution of all associated 

and necessary assets, in a manner that restores two or more distinct and separate, 

viable and independent businesses in the relevant markets, with the ability to offer 

such products and services as Tronox and Cristal were offering and planning to 

offer prior to the Acquisition.

2. A prohibition against any transaction between Tronox and Cristal that combines 

their businesses in the relevant markets, except as may be approved by the 

Commission.
15

3. A requirement that, for a period of time, Tronox and Cristal provide prior notice 

to the Commission of acquisitions, mergers, consolidations, or any other 

combinations of their businesses in the relevant markets with any other company 

operating in the relevant markets.

4. A requirement to file periodic compliance reports with the Commission.

5. Any other relief appropriate to correct or remedy the anticompetitive effects of the 

transaction or to restore Cristal as a viable, independent competitor in the relevant 

markets.

IN WITNESS WHEREOF, the Federal Trade Commission has caused this complaint to 

be signed by its Secretary and its official seal to be hereto affixed, at Washington, D.C., this fifth

day of December, 2017.

By the Commission.

Donald S. Clark

Secretary

SEAL: