CALGARY -- German specialty chemicals maker Evonik Industries AG has agreed to sell a plant in Prince George, B.C., to address Competition Bureau concerns about its proposed US$625-million takeover of U.S.-based PeroxyChem Holding Company LLC.
The Canadian competition regulator found that the deal would result in the loss of a "competitive rivalry" between Evonik's hydrogen peroxide facility at Gibbons, just north of Edmonton in Alberta, and PeroxyChem's plant in Prince George, leaving a capacity-constrained manufacturer in Longview, Wash., as the only nearby competitor.
Hydrogen peroxide is used mainly as a bleaching agent for pulp and paper or as a treatment chemical in the oil and gas and mining sectors. Because of its bulk, customers prefer to buy it from nearby manufacturers to avoid transportation costs.
The Competition Bureau says it has investigated and approved the sale of the Prince George facility by Evonik to United Initiators, an unrelated German chemicals manufacturer.
The deal to buy PeroxyChem from One Equity Partners was announced in late 2018. Closing was delayed when the U.S. Federal Trade Commission announced last summer it would file a lawsuit to block the acquisition, a block removed last week when its request for a court injunction was denied.
Philadelphia-based PeroxyChem has about 600 employees worldwide, with two chemical production sites in Eastern Canada, two in the United States and one each in Germany, Spain and Thailand.
Evonik says on its website it operates in over 100 countries and has more than 32,000 employees. It has production facilities in 30 countries, including four in Canada.