Mexico's antitrust authority has upheld its decision to block PVC and specialty chemicals maker Mexichem SAB de CV's proposed purchase of plastic pipe maker Plasticos Rex SA de CV and PVC resin producer Polycid SA de CV from chemical company Cydsa SAB de CV of Garza García, Mexico.
A source with the Federal Competition Commission (CFC) said the authority will publish the reasons behind its decision later this month.
Enrique Ortega, Mexichem's investment relations director, said the chemicals giant will appeal the ruling.
In its original objections to the acquisitions, the CFC argued that the proposals represented a “risk for the market.”
Anipac (Asociacón Nacional de Industrias del Plastico AC), Mexico's plastics industry trade association, has claimed that the acquisitions would create a monopoly of PVC resin supplies in the country.
Formed in 1978, Mexico City-based Mexichem is three years into a five-year, $1 billion acquisition spree across the Americas.
In a separate development, Ortega said a four-company consortium to which Mexichem belongs has sent state oil monopoly Pemex (Petróleos Mexicanos) an offer for the ethane feedstock required for a $1 billion ethylene cracker that the quartet is interested in building on Mexico's Gulf Coast.
Ortega expects Pemex to make a decision on whether the offer is acceptable within a month or so. There was no immediate comment from Pemex.
Apart from Mexichem, the consortium comprises Brazil's Braskem SA, Latin America's largest petrochemical company; Mexico's Grupo Idesa SA de CV; and Alpek SA de CV, a subsidiary of Mexico's Alfa Group.
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