Tronox to Buy Cristal’s TiO2 Business
US titanium dioxide (TiO2) producer Tronox is to acquire the TiO2 business of Saudi Arabia’s Cristal, expanding its global footprint and presence in faster growing, emerging markets. At the same time, Tronox said it intends to put its alkali business up for sale.
The Stamford, Connecticut-headquartered company has offered to buy Cristal for $1.673 billion in cash and Class A shares, representing a 24% ownership in pro forma Tronox. The cash portion of the acquisition will be funded from the alkali proceeds and the sale of other non-core assets if appropriate, Tronox said.
The combined business would create the world’s largest and most highly integrated TiO2 pigment producer with assets and operations on six continents. The enlarged group will operate 11 TiO2 plants in eight countries, producing a total of 1.3m t/y. It will also have titanium feedstock operations in three countries with a total capacity of 1.5m t/y.
Subject to negotiations, Tronox said it also intends to acquire Cristal's 500,000 t/y TiO2 slag production facility in Yanbu, Saudi Arabia.
The board of directors at both companies have given their unanimous approval to the merger. The transaction remains subject to approval by Tronox Class A and B shareholders, as well as regulatory clearance and the usual closing conditions. Completion is expected before the first quarter of 2018.
Cristal is owned 79% by Tasnee, a listed Saudi joint-stock company, and 20% by Gulf Investment Corporation. Mutlaq Al-Morished, CEO of Tasnee, said the deal allows Tasnee to focus on its petrochemical assets, downstream business and other strategic business development opportunities, while substantially deleveraging its balance sheet.
Commenting on plans to sell its alkali business, Tronox CEO Tom Casey said the decision comes at an attractive time as the global market for natural soda ash is recovering and prices are improving. The US company expects to complete the alkali divestment in the second half of 2017.
