Washington, DC – FXI must sell a plant, plus two of Innocor's, after it buys Innocor to stop the FTC from objecting to the deal.
FXI announced its intention to buy Innocor for $850m in March 2019. Flexible foam plants in in Washington, Indiana and Mississippi are affected by the decision.
The Federal Trade Commission said that without the sale, the merger 'would substantially lessen competition for low-density conventional polyurethane foam'.
The FTC focused its attention on three regional markets: the Pacific Northwest, the Midwest and Mississippi. According to the FTC, FXI and Innocor are the only suppliers in the Pacific northwest region. The combined company would contain two of the three suppliers in the Midwest, and half of the suppliers in Mississippi.
'The proposed acquisition would eliminate direct competition between FXI and Innocor. It would increase the likelihood of coordinated interaction among the remaining competitors,' said the FTC.
The FTC expects FXI to transfer ownership of its flexible foam plant in Kent, Washington to Future Foam. Innocor's plants in Elkhart, Indiana and Tupelo, Mississippi will also have to go to Future Foam. FXI has 10 days after the deal closes to complete the divestments.
Future Foam is a family-owned business headquartered in Iowa. It operates foaming factories in Main, North Carolina, Wisconsin, Iowa, Kansas and California.