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Archived — Competition Bureau requires divestitures in Herbicide merger

OTTAWA, July 28, 2010 — The Competition Bureau has reached an agreement with Nufarm Limited to resolve competition concerns raised by its acquisition of AH Marks Holding Limited. The Bureau determined that commitments made by Nufarm to the Bureau and a consent decree between Nufarm and the United States Federal Trade Commission (FTC) adequately resolve competition concerns in Canada.

Following a detailed review, the Bureau concluded that the transaction would likely lead to a substantial lessening or prevention of competition in the supply of 2-methyl-4-chlorophenoxyacetic acid (MCPA) in Canada to herbicide formulators, retailers and/or farmers. MCPA is an active ingredient in many broadleaf herbicides designed for use in cereal and grasslands.

Under a proposed settlement with the FTC, Nufarm will sell rights and assets associated with two selective, post-emergent herbicides to competitors, and modify agreements with two other companies to allow them to fully compete in the market.

The proposed settlement requires Nufarm to sell A.H. Marks' MCPA rights and assets to a new competitor, Albaugh Inc., and A.H. Marks' dimethylamine salt (MCPP-p) rights and assets to another new competitor, PBI Gordon Co. In addition, Nufarm will modify its current agreements with The Dow Chemical Company and Aceto Corporation related to MCPA and 4-(2,4-dichlorophenoxy) butyric acid (2,4-DB). Specifically in Canada, Nufarm will divest its MCPA Task Force seat, along with Canadian MCPA Technical Registrations and Canadian Formulated Product Registrations to Albaugh.

There was extensive international cooperation leading to the resolution of this case. The Australian Competition and Consumer Commission, and the United Kingdom's Office of Fair Trading and Competition Commission also reviewed this merger. The parties reached a separate agreement in the United Kingdom resolving similar concerns. The Competition Bureau worked closely with FTC staff throughout the investigation to arrive at a proposed settlement order that restores competition in both Canadian and U.S. markets for MCPA. Throughout their respective investigations, staff from various international partners and the FTC coordinated their enforcement efforts under the terms of relevant cooperation agreements and the OECD recommendation on cooperation among its members.

Mergers in Canada are subject to review by the Bureau under the Competition Act to ensure that they will not result in a substantial lessening and/or prevention of competition.

The Competition Bureau is an independent law enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

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