US Huntsman expects Europe approval of Rockwood pigments by end Q3

30 July 2014 20:48 Source:ICIS News

HOUSTON (ICIS)--Huntsman expects that by the end of the third quarter, European regulators will approve its proposal to acquire Rockwood's pigments business, the CEO said on Wednesday.

The deal should then close within days of receiving approval, said Peter Huntsman, CEO. He made his comments during an earnings conference call.

While US regulators have already approved the deal, it is still being reviewed in Europe.

To address the concerns of the European Commission, Huntsman has proposed certain remedies, the CEO said.

He could not specify what these remedies are, but Huntsman said they are immaterial to the overall business and they do not involve the divestiture of a facility.

Kimo Esplin, Huntsman chief financial officer, said the remedies are insignificant.

For the entire pigments business, the remedies would have an impact of $5m-10m in earnings before interest, tax, depreciation and amortisation (EBITDA).

Meanwhile, Huntsman said, "We're in the process of extending the termination agreement with Rockwood and related financing to accommodate any possible delays that may arise from the European Commission review."

Huntsman is acquiring Rockwood's titanium dioxide (TiO2) pigments segment, along with its performance additives business, which includes colour pigments, timber treatment and other chemicals.

Huntsman is acquiring the Rockwood businesses for $1.1bn, plus the assumption of $225m in pension liabilities.

Once the deal closes, the combined Huntsman and Rockwood pigments businesses would be subject to a public offering within two years.

The business will enter the market as the second largest producer of TiO2 and inorganic colour pigments as well as the largest buyer of sulphate ores, Huntsman has said. It will offer the widest range of colour and white pigments of any other company.

By Al Greenwood