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UPDATE 1-U.S. sues to stop merger of hydrogen peroxide makers Evonik and PeroxyChem

PeroxyChem@ (Adds details on FTC concerns, advisory)

WASHINGTON, Aug 2 (Reuters) - The U.S. Federal Trade Commission said on Friday it was suing to stop Evonik Industries AG's proposed purchase of rival hydrogen peroxide maker PeroxyChem Holding Company, citing concerns that the deal would lead to higher prices.

The $625 million sale by group One Equity Partners, announced in November, is aimed at giving Evonik above-average growth rates of around 6% in the hydrogen peroxide and peracetic acid markets.

Hydrogen peroxide is used primarily as a bleaching agent in the paper industry, and also as a disinfectant for food processing or for wastewater treatment, the FTC said in its complaint.

The FTC said the proposed acquisition would leave just one other hydrogen peroxide supplier in the Pacific Northwest. In the southern and central United States, four suppliers would remain after the merger but Evonik would control nearly half the production capacity, the FTC said in its complaint.

Because hydrogen peroxide is expensive to ship, companies tend to try to buy locally, the FTC said.

Neither Evonik nor One Equity immediately responded to a request for comment. (Reporting by Diane Bartz; Editing by Richard Chang)