Union Carbide Corp. went to court last week in an effort to delay the $6 billion joint venture between the world's largest polypropylene producers, Italy's Montedison SpA and Royal Dutch/Shell Group. While Dutch/Shell Group announced Jan. 11 it reached a settlement with the U.S. Federal Trade Commission that would permit the planned merger of its PP operations with Montedison, Union Carbide said it sought a preliminary injunction to delay the merger until the divestitures ordered by the FTC are completed.
The Royal Dutch/Shell Group gained approval for the merger by agreeing to sell its Shell Oil unit's PP to Union Carbide or other FTC-approved buyers.
The agreement settles charges that the merger would reduce both competition and U.S. exports of the plastic, the FTC said.
But Union Carbide of Danbury Conn., said Jan. 11 in U.S. Dis-trict Court in New York that it is concerned that the divestiture will not occur for many months.
``This delay will lead to significant harm to competition. To minimize such harm, Union Carbide brought suit,'' the company said in a prepared statement. Union Carbide is seeking an injunction that would postpone the merger until Royal Dutch/Shell divests the assets of its Houston-based PP operations.
Royal Dutch/Shell is based in London and The Hague, Netherlands. Montedison is based in Milan.
The merger of the firms' PP businesses is expected to affect European markets far more than North American markets, and does not directly include Himont, U.S.A. Inc. of Wilmington, Del. Himont is owned by Montedison.
The FTC also had challenged a profit-sharing agreement between Montedison and Japan's Mitsui Petrochemical Industries concerning PP licenses. The FTC said the settlement would require Montedison to forsake revenues under the agreement from future U.S. licenses by Mitsui.
