RIYADH: Tronox Holdings plc, a global mining and inorganic chemicals company, acquired the titanium dioxide (“TiO2“) business of The National Titanium Dioxide Company Limited (Cristal). Upon closing of this transaction, Cristal will receive a cash consideration of US$1.673 billion and a 24% equity position in Tronox.
National Industrialization Company (TASNEE), Saudi Arabia’s first joint-stock industrial company fully owned by the private sector, has confirmed that the U.S. Federal Trade Commission (FTC) has approved Tronox Limited’s proposed acquisition of the titanium dioxide (TiO2) business of The National Titanium Dioxide Company Limited (Cristal), a TASNEE subsidiary.
The FTC issued an Order and Decision allowing the transaction to proceed with the remedy divestiture of Cristal’s North American TiO2 business to INEOS Enterprises, a division of INEOS (INEOS).
The Cristal transaction with Tronox closed Wednesday night April 10, 2019, TASNEE said in a notice.
“I am pleased this transformative acquisition has finally been completed and I greatly admire the resiliency both organizations have shown throughout this process. I also appreciate the professionalism and collaborative mindset applied by the FTC Bureau of Competition and the staff of the FTC in working with Tronox, Cristal and INEOS to reach this resolution,” said Jeffry N. Quinn, Chairman and Chief Executive Officer of Tronox. “We look forward to getting to the business of creating value for our shareholders, serving the needs of our global customers and creating opportunities for our employees.”
The cash consideration shall be substantially used to fully prepay the outstanding bank debt of Cristal which is consolidated in TASNEE’s consolidated financial statements. Upon closing of this transaction, TASNEE’s consolidated financial statements for the quarter ending June 30, 2019 shall reflect the deconsolidation of Cristal assets and liabilities, which are part of this transaction and the equity investment in Tronox shall be reported as an investment in an affiliate.
The valuation of equity investment in Tronox and financial impact resulting from this transaction shall be determined based on the review of balance sheet at closing date by the independent auditors and reflected in the TASNEE’s consolidated financial statements for the quarter ending June 30, 2019.
The two Directors of Tasnee Board, namely Dr. Talal Ali Al Shair (in his personal capacity), and Mr. Ibrahim Al Qadi (in his capacity as the representative of Gulf Investment Corporation “GIC”) own 1% and 20% of Cristal’s issued shares, respectively. TASNEE owns 79% of Cristal’s issued shares.
TASNEE’s CEO Mutlaq H. Al-Morished commented, “This transaction enables Cristal and Tronox to position the combined businesses for long-term success in the titanium dioxide (TiO2) global industry that will benefit from a fully integrated global asset base and derive significant synergies. This also allows TASNEE to focus on its petrochemical assets, downstream business and other strategic business development opportunities, while substantially deleveraging its consolidated balance sheet.”[the_ad id=”31605″]