Commission reviewing Omya acquisition plans

April 4, 2006
By Bruce Edwards Herald Staff

More than a year after the Swiss parent company of Omya Inc. announced plans to acquire a calcium carbonate rival, the European Commission is apparently having serious concerns the deal could stifle competition.

The European Commission last year opened an investigation into Omya AG's purchase of a dozen calcium carbonate plants from J.M. Huber Corp., of Edison, N.J. The proposed purchase includes Huber manufacturing plants in the United States, Canada, Europe, Russia and South America.

According to Reuters, the European Commission set a new deadline to decide Omya's proposed purchase.

The Commission's review of the deal, which had been suspended, has been re-started with a new deadline of June 28, nearly 11 months after it was first filed.

The new deadline will give the Commission time to issue a new Statement of Objections, which would give it time to either require modifications to the deal, or to reject it outright.

Should the merger receive approval, Omya would be in a position to supply between 70 percent and 85 percent of the carbonates needed by the paper industry in Europe.

James Reddy, Omya executive vice president for North American operations, remained confident the European Commission would approve the deal.

"We're still optimistic, but it's back before the EU and there's nothing I know and nothing we can say," Reddy said Monday from the company's Proctor headquarters.

Reddy said the Commission's final decision would have no effect on Omya's North American operations since Huber's four North American plants supply different papermaking customers.

Reuters reported that the deal had appeared headed for approval until the Commission abruptly suspended it in March, for the fifth time, and sent out a new round of questionnaires to customers and competitors.

When Omya proposed buying the carbonate operations of Huber last year Finnish authorities objected to the deal.

The Finnish competition authority estimated that the merged operation would have up to 85 percent of the carbonates market for the 25 EU nations and the three additional members of the European Economic Area.

The situation would be even more extreme in Finland, approaching something between 80 percent and 95 percent of the market in that country.

Omya is a family-owned company that sells a range of industrial minerals to the paper industry using both the precipitated calcium carbonate (PCC) and ground calcium carbonate (GCC) process.

Calcium carbonate has a variety of uses in the paper industry, acting as filling agents which reduce the need for tree pulp and as coating agents giving the finished product the right color, desired opacity and printing quality.

Omya announced in February 2005 that it would acquire all of J.M. Huber's precipitated calcium carbonate operations in the United States, Brazil, Finland, Sweden, Canada, Portugal, France and Russia. The three U.S. plants are located in Pennsylvania, Kentucky and Tennessee.

If completed, Omya would have 17 precipitated calcium carbonate plants worldwide and the company's first PCC plants in the United States.

No purchase price was disclosed.

Omya's specialty is ground calcium carbonate with more than 100 plants in 30 countries, including its largest North American plant in Florence and a quarry in Middlebury.

Founded in 1884 by the husband and wife team of Gottfried Pluss and Emma Staufer, Omya (formerly Pluss-Staufer) is owned by the Schachenmann family. The company employs 5,000 workers in more than 50 countries.

J.M. Huber Corp. of Edison, N.J., is a privately held multinational supplier of engineered materials, natural resources and technology-based services to customers spanning industries from paper and energy to plastics and construction. The company has annual sales in excess of $1 billion.