FXI and Innocor to Divest Three Plants
FTC Requires Polyurethane Foam Producers FXI Holdings, Inc. and Innocor, Inc. To Divest Assets in Three Regional Markets
Agency alleges merger would reduce competition among producers of foam used in home furnishings
Polyurethane foam producers FXI Holdings, Inc. and Innocor, Inc. have agreed to divest polyurethane foam pouring plants in three regional markets to Future Foam, Inc., to settle Federal Trade Commission charges that FXI’s proposed $850 million acquisition of Innocor would violate federal antitrust law.
The FTC alleges that the combination of FXI and Innocor would substantially lessen competition for low-density conventional polyurethane foam used in home furnishings in three regional markets: the Pacific Northwest (Oregon and Washington); the Midwest states of Indiana, Michigan, and Ohio; and Mississippi.
The complaint states that regional markets are appropriate because low-density foam is bulky and expensive to ship, relative to the value of the product. FXI and Innocor are the only suppliers in the Pacific Northwest, two of three major suppliers in the Midwest states, and two of four major suppliers in Mississippi, according to the complaint.
The complaint alleges that without a remedy, the proposed acquisition would eliminate direct and substantial competition between FXI and Innocor and would increase the likelihood of coordinated interaction among the remaining competitors in each regional market.
To remedy the proposed transaction’s anticompetitive effects, the proposed order requires the companies to divest FXI’s foam-pouring plant in Kent, Washington and Innocor’s foam-pouring plants in Elkhart, Indiana and Tupelo, Mississippi to Future Foam no later than 10 days after the close of the acquisition. Further information about the consent agreement—including details on transitional assistance and the appointment of a monitor—are set forth in the analysis to aid public comment for this matter.
The Commission vote to issue the complaint and accept the proposed consent order for public comment was 5-0. The FTC will publish the consent agreement package in the Federal Register shortly. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.