Corrected: UK Venator may buy Cristal TiO2 plant in US

Source: ICIS News

2018/07/16

Correction: The ICIS article headlined “UK Venator may buy Cristal TiO2 plant in US” dated 16 July 2018 cited plant capacities from a database with inaccurate figures. Please read in the sixth paragraph … Ashtabula has two plants with a combined capacity of 245,000 tonnes/year. A corrected story follows.

HOUSTON (ICIS)--Venator Materials may acquire Cristal's pigment plant in Ohio under an agreement it signed with Tronox, the UK- and US-based titanium dioxide (TiO2) producers each said on Monday.

It is one of two agreements that Tronox signed with Venator.

Both are connected to Tronox's proposed acquisition of Cristal, which is also known as National Titanium Dioxide.

Tronox announced the $2.4bn acquisition in February 2017.

Under the agreement announced on Monday, Tronox said it entered into a binding memorandum of understanding (MOU) with Venator, which will grant the UK producer a 75-day exclusivity period to negotiate the purchase of Cristal's Ashtabula complex.

Ashtabula has two plants with a combined capacity of 245,000 tonnes/year.

The purchase price will depend on how the US approval process progresses in Tronox's bid to acquire Cristal, Tronox said.

US regulators have challenged the acquisition both in federal court and in administrative-law court.

If the federal court issues a preliminary injunction to prevent the acquisition, then Tronox has the right to require Venator to buy the Ashtabula complex for $1.1bn, Tronox said in a news release.

If Tronox does not exercise this right promptly and if it continues to fight the regulators in administrative-law court, then it could require Venator to buy the complex for $900m after the litigation is completed, Tronox said in the news release.

Venator could require Tronox to sell the plant for $900m if the company does not exercise its right to sell the plant, Tronox said in a news release.

Tronox will pay Venator a break-up fee of $75m if it is able to complete the Cristal acquisition without being forced by regulators to sell the Ashtabula plant, Tronox said in a news release.

Cristal did not immediately respond to a request for comment.

Under another agreement announced on Monday, Tronox has proposed selling its European paper laminates to Venator, Tronox said in a news release.

Selling the paper laminates was one of the conditions of getting regulatory approval from the European Commission, Tronox said. If the commission approves the agreement, then approval of the Cristal acquisition should be final, Tronox said.

Under the agreement, Tronox said it would sell its 8120 paper-laminate product grade that it supplies to European customers from its plant in Botlek, the Netherlands.

The plant has a TiO2 capacity of 90,000 tonnes/year.

The agreement does not include the sale of any operations or production assets, Tronox said in a separate statement, made in response to a request seeking additional clarification about the deal.

Venator said in a separate news release that the supply arrangement will continue until the transfer of the manufacturing of the 8120 grade to Venator's plant in Greatham, UK.

The agreement includes technology specific to the 8120 grade as well as a customer list and any contracts related to the 8120 grade, Venator said in a separate statement, made in response to a request seeking additional clarification about the deal.

Neither Venator nor Tronox provided financial details for the paper-laminates agreement.

In a statement included in the news release, Tronox CEO Jeffry Quinn said, "We believe the Venator MOU, together with the filing of the 8120 divestiture agreements with the European Commission, demonstrates our commitment to completing the Cristal transaction and preserving shareholder value."

In a statement included in its separate news release, Venator CEO Simon Turner said, "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."

The request for the preliminary injunction is being considered in US District Court for the District of Columbia. The case number is 18-cv-1622.

(adds additional comments from Venator, paragraph 20)

Pictured above: Titanium dioxide (TiO2) is used in white paint. (Photo by REX/Shutterstock)