Quaker Chemical Corp. and Houghton International Inc. have agreed to divest certain products and related assets to a subsidiary of French multinational corporation Total S.A., to settle U.S. Federal Trade Commission (FTC) charges that Quaker’s proposed USD1.4 billion acquisition of Houghton would violate federal antitrust law.

The FTC’s complaint alleges that the proposed acquisition would harm competition in the North American market for aluminum hot rolling oil (AHRO) and steel cold rolling oil (SCRO) and associated technical support services. According to the complaint, the SCRO market includes sheet cold rolling oil, tin plate rolling oil (TPRO) and pickle oil. AHRO, SCRO, TPRO, and pickle oil are critical inputs in the production of sheet metal.

The complaint alleges the proposed transaction may substantially lessen competition in the markets for SCRO, AHRO, and their associated technical support services. Quaker Chemical and Houghton International are the only two commercial suppliers of AHRO in North America and the two largest commercial suppliers of SCRO in North America, according to the complaint.

Under the proposed settlement agreement, Quaker Chemical must divest Houghton’s North American AHRO and SCRO product lines and related assets to Total. The proposed settlement agreement also requires Quaker to divest to Total certain product lines used in conjunction with AHRO and SCRO, including steel cleaners and AHRO compatible hydraulic fluids.

The commission vote to issue the complaint and accept the proposed consent order for public comment was 5-0. The FTC will publish the consent agreement package in the Federal Register shortly. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.