Tronox Agrees Sale of Paper-grade TiO2 to Venator

Tronox has submitted to the European Commission a definitive agreement to sell its paper laminate grade of titanium dioxide (TiO2) to Venator Materials, Huntsman’s former TiO2 and specialty chemicals business that was spun off in 2017.

The sale is part of concessions Tronox has made to European regulators in order to secure approval for its acquisition of Saudi pigment producer, Cristal. If the Commission approves the definitive agreement, its approval of the Cristal deal will be final, Tronox said.

The US TiO2 producer said it will continue to supply the 8120 paper laminate grade to Venator under a transitional supply agreement until transfer to Venator’s facility in Greatham, UK, has been completed.

Simon Turner, Venator’s president and CEO, commented: “The agreement to acquire the paper laminates business further strengthens and diversifies our global TiO2 business. It also extends our European market leadership and further expands our differentiated product range.”

Tronox has also entered into a binding memorandum of understanding (MoU) with Venator to negotiate the sale of Cristal’s complex in Ashtabula, Ohio, should such a divestment be required after the US District Court rules in a pending preliminary injunction hearing. The MoU gives Venator exclusivity for 75 days – until Sept. 29 – to negotiate a definitive agreement.

“The Memorandum of Understanding with Venator enables Tronox to vigorously defend the merits of the Cristal transaction in US District Court, while ensuring we are prepared to move swiftly with a remedy transaction at a reasonable valuation if the Ashtabula divestiture is required,” said Jeffry Quinn, president and CEO of Tronox.

Turner added: “The addition of the high quality Ashtabula facilities would dramatically grow our North American presence and global TiO2 capacity, enabling us to better serve our valued customers. In light of this potential acquisition, we are reviewing our near term needs for the full rebuild of TiO2 capacity at our previously damaged TiO2 facility in Pori, Finland.” The 130,000 t/y plant has been out of action since it was badly damaged in a fire on Jan. 30, 2017.

If the Court issues a preliminary injunction to prevent its takeover of Cristal, then Tronox has the right to require Venator to buy Ashtabula for $1.1 billion. The purchase price will be reduced, however, to $900 million if, instead of promptly divesting Ashtabula, Tronox continues to await the decision of the Federal Trade Commission's Administrative Law Judge following an adverse ruling by the Court.

The parties have also agreed that Tronox will promptly pay Venator a “break fee” of $75 million upon completion of the Cristal merger if a sale of the paper-grade pigment to Venator has been finalized and the Ashtabula site is not sold to Venator.