US titanium dioxide (TiO2) producer Tronox has signed a definitive agreement to sell its Alkali Chemicals business to midstream services provider Genesis Energy LP for $1.33 billion in cash. Tronox will use the proceeds to fund the major portion of its purchase of Saudi Arabian TiO2 producer, Cristal, which is expected to close by the first quarter of 2018.

Peter Johnston, CEO of Tronox, said multiple potential buyers showed interest in its alkali business. However, Genesis’ proposal was the most compelling for its overall value and provided the highest level of certainty to Tronox.

Alkali Chemicals is the world’s largest producer of natural soda ash (also known as sodium carbonate) with mining and processing facilities located in Green River, Wyoming, USA. Natural soda ash is used in a variety of products, including glass, detergents, baked goods, animal nutrition supplements, pharmaceuticals, among others.

The business produces approximately 4m t/y, representing approximately 28% of the world’s natural soda ash output. Genesis said that, based on current production rates, the assets have an estimated remaining reserve life of more than 100 years.

Grant Sims, CEO of Genesis, commented: “The acquisition of Tronox’s alkali business is an exciting growth opportunity for us. We believe the acquisition to be immediately deleveraging and will provide further diversification and substantial scale to the partnership. The business is a great strategic fit with our current asset base and shares many characteristics with our existing refinery services business. It is a market leader with high barriers to entry, and generates stable and predictable cash flow, with production sold out each of the last seven years and an estimated EBITDA for the last twelve month period ending Jun. 30, 2017 of $166 million.”

The transaction is expected to close in the second half of 2017, subject to the usual closing conditions and regulatory approvals.

Alkali Chemicals was originally part of FMC, which sold the unit to Tronox for $1.64 billion in 2015.