A powerful alliance of European chemical manufacturers has formally requested the European Commission launch an investigation into China's LB Group over its planned acquisition of a production facility in the United Kingdom. The move, seen as a direct challenge to Beijing's industrial strategy, centres on fears that the Chinese giant is using the UK as a backdoor to flood the EU market with subsidised products.
The complaint, filed in December 2025, targets LB Group's bid to purchase a titanium dioxide plant in Greatham, northeast England, from British competitor Venator. Titanium dioxide is a strategic white pigment critical for manufacturing paints, plastics, and components in the green energy and aerospace sectors. The UK's Competition and Markets Authority is reviewing the deal, with a decision expected in May.
A Bid to Circumvent EU Trade Defences
The core allegation from the EU producers is that the acquisition is a deliberate manoeuvre to sidestep anti-dumping duties the Commission imposed on LB Group in January 2025. These duties were levied to counteract what Brussels deemed unfairly low-priced imports from China that were harming European industry. Under the terms of the EU-UK Trade and Cooperation Agreement, products manufactured in Britain can enter the EU single market tariff-free. By acquiring the Greatham plant, LB Group could theoretically export its titanium dioxide into the EU without paying the punitive anti-dumping tariffs.
"This isn't merely a commercial acquisition; it's a strategic play to undermine the EU's trade defence instruments," a source familiar with the complaint told European Pulse. The alliance argues that LB Group benefits from distortive foreign subsidies from the Chinese state, which allow it to finance such acquisitions and sustain production overcapacity that depresses global prices.
The complaining coalition includes major players responsible for approximately 90% of the EU's titanium dioxide output. Its members are US-based firms Tronox and Kronos, which have significant production footprints in the Netherlands and Germany respectively, alongside Czech company Precheza and Slovenia's Cinkarna. Their collective action underscores the intense pressure the European chemical sector faces from growing Chinese competition, which has been accused of flooding global markets.
Testing the Foreign Subsidies Regulation
The legal basis for the complaint is the EU's Foreign Subsidies Regulation (FSR), a powerful tool adopted in 2022. The FSR grants the Commission authority to investigate non-EU companies suspected of using distortive state subsidies to gain an unfair advantage when acquiring EU businesses or participating in public tenders. While the regulation was explicitly crafted with China in mind, it has never been applied to an acquisition target located outside the EU's jurisdiction—in this case, the United Kingdom.
If Executive Vice-President Margrethe Vestager's Directorate-General for Competition decides to open a formal in-depth investigation, it would represent a major expansion of the FSR's geographic scope and set a significant precedent. It would signal Brussels's willingness to scrutinise deals in neighbouring states like the UK, Switzerland, and Norway if they are perceived as conduits for subsidised products destined for the single market. This comes as the EU seeks to defend its economic sovereignty and strategic industries, a stance reflected in varied approaches across the continent, such as the pragmatic course on Chinese investment being charted by Hungary's new government.
A decision to probe the LB Group-Venator deal would send a strong global message about the EU's readiness to deploy its regulatory armoury defensively. It also highlights the complex post-Brexit economic landscape, where the UK's regulatory autonomy can create new friction points with EU trade policy. The outcome could influence how Chinese firms structure future investments in Europe's periphery.
The case emerges against a backdrop of broader EU efforts to shield its industry. Similar concerns over market distortion have led to actions like tariffs on Chinese glass fibre made in third countries. For the European chemical producers, the threat is existential; they argue that losing market share at home to subsidised competitors jeopardises high-skilled jobs and strategic manufacturing capacity crucial for Europe's green and digital transitions.
The European Commission now faces a delicate decision. Launching an investigation would risk diplomatic tensions with Beijing and potentially complicate relations with London. However, declining to act could be viewed as weakening the EU's nascent defensive toolkit and emboldening similar circumvention attempts. The chemical producers' complaint has placed a critical test of Europe's industrial resolve squarely on the table in Brussels.
