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The Federal Trade Commission today announced it has allowed Cytec Industries, Inc.’s (Cytec) proposed $1.8 billion acquisition of the Surface Specialties Business of Belgium’s UCB S.A., provided Cytec divests UCB’s Amino Resins Business to a Commission-approved buyer within six months. According to the FTC’s complaint in this matter, for many years Cytec and UCB have been direct and substantial competitors in the market for amino resins, and absent the relief the consent order ensures, this competition would be lost and not easily replaced. The result, the FTC contends, would be higher prices for consumers in the markets for amino resins for industrial liquid coatings and adhesion promotion in rubber.

The Relevant Product Markets

Both Cytec and UCB manufacture and sell amino resins used for industrial liquid coatings and rubber adhesion promotion. The resins the companies make are used as cross-linking agents in thermoset surface coatings for a range of applications, including automotive coatings, coil coatings, can coatings, appliance coatings, and general maintenance coatings. Amino resins also are used, primarily in tires, to promote the adhesion of rubber to materials such as steel or fiber.

The FTC’s Complaint

According to the FTC’s complaint, the proposed acquisition would violate Section 5 of the FTC Act and Section 7 of the Clayton Act, as amended, in the relevant markets for amino resins for industrial liquid coatings and adhesion promotion in rubber. The complaint states that for many years Cytec and UCB have been the two major competitors in these markets, competing with each other across a wide range of amino resin grades and applications. In addition, the markets for these products already are highly concentrated, the FTC contends, and would become more so without the relief provided by the order.

In the past, according to the complaint, customers have relied on competition between Cytec and UCB to maintain competitive amino resin prices. If Cytec were allowed to buy UCB’s Surface Specialties division unconditionally, the FTC alleges that the significant direct competition that has existed between the two companies would be eliminated. Also, entry into the relevant product markets would not be likely, timely, or sufficient to mitigate the adverse anticompetitive effects of the transaction. Specifically, entering firms would not be able to offer the range of amino resin grades that Cytec and UCB have developed over the years or to meet the high standards of their customers.

The Proposed Consent Order

The consent order remedies the alleged anticompetitive effects of the proposed transaction by requiring Cytec to divest the UCB Amino Resins Business to a Commission-approved acquirer within 180 days. The business to be divested includes two manufacturing facilities, in Massachusetts and Germany, where UCB makes amino resins, and also includes UCB’s rights to obtain amino resins under an agreement between UCB and Solutia Canada, Inc. UCB’s resins business also includes lines of certain additives and other products made at the Germany plant. In addition, Cytec is required to divest the patents and other intellectual property that UCB has used in its amino resins business, as well as other records related to the business. Cytec also must assign contracts related to the amino resin business and take all steps necessary to ensure that, until the divestiture is completed, the Amino Resins Business remains viable so the acquirer will be competitive in the post-merger environment.

The order states that if Cytec does not divest the UCB Amino Resins Business within six months, the Commission may appoint a divestiture trustee to accomplish the sale. In addition, the order allows the FTC to appoint a monitor trustee to oversee Cytec’s compliance with its terms pending the completion of the divestiture. Finally, the order contains an order to hold separate and maintain assets to ensure the viability and marketability of the Amino Resins Business is maintained prior to its divestiture. The Hold Separate Order also contains terms to ensure that no confidential information is exchanged between Cytec and UCB while the divestiture is pending. It further provides that the FTC may appoint a hold separate trustee to monitor Cytec’s compliance with the Hold Separate Order. Finally, the order contains certain reporting terms to ensure that Cytec fully complies with its requirements.

The Commission vote to approve the complaint, consent order, and order to hold separate and maintain assets was 5-0. The order will be subject to public comment for 30 days, until March 30, 2005, after which the Commission will decide whether to make it final. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

Copies of the complaint, consent order, order to hold separate, and an analysis to aid public comment are available from the FTC’s Web site at and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC’s Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC. 20580, Electronic Mail:; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published “Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws,” which can be accessed at

(FTC File No.: 041-0203)

Contact Information

Media Contact:
Mitchell J. Katz
Office of Public Affairs
Staff Contact:
Robert S. Tovsky
Bureau of Competition