Ineos comes to Tronox's aid with £550m US plant buy-out to pave way for Cristal deal
By Grimsby Telegraph | Posted: 5 Dec 2018
Cristal-chasing Tronox appears to have reached a deal to sell two American plants as it seeks to remove a US regulatory block on the global buy-out.
Ineos, the world’s largest chemical company, has emerged as a potential buyer of two Cristal plants in Ashtabula, Ohio, which would eliminate competitive concerns in the US over titanium dioxide production.
If satisfied, the deal - which features the Europe-leading sprawling Stallingbrough plant on the South Humber Bank - will be able to complete.
A $700-million (£549m) acquisition has been put forward, with Tronox filing a motion with the chief administrative law judge overseeing ongoing proceedings, to present the “remedy” action.
Rival firm Venator Materials was in exclusive talks, but that looks to have failed. It has already agreed a Dutch buy-out to appease Brussels regulators.
Jeffry N Quinn, president and chief executive officer of Tronox, said: “Ineos is an experienced and sophisticated purchaser of chemical operating assets, with dozens of successful acquisitions in the last two decades, particularly in chemical carve-out acquisitions. I believe this ideally positions the Ashtabula complex and Ineos to flourish as a stable and competitive new entrant into the TiO2 market.
“The proposed consent decree eliminates the competitive concerns alleged in the Federal Trade Commission’s original complaint and it does so while providing the necessary foundation for the divested assets to be commercially successful.”
Under the deal, the Ashtabula complex, along with all of its associated assets – including research and development, sales, intellectual property and operations expertise – would be held separate during a short interim period while the proposed divestiture is pending.
Approval in all other areas, including the EU, has been received, and FTC blessing would allow the deal to complete. With the merger challenged, under US regulations, Tronox is unable to present the solution without the judge’s consent.
The motion asks the court to make a written determination, within a five-day period, that there is a reasonable possibility of settlement and certify the proposed consent decree for the FTC Commissioners’ consideration with a recommendation that the FTC Commissioners accept the proposed resolution of the case.
Mr Quinn added: “Our priority continues to be to close the Cristal acquisition as soon as possible so we can immediately get to the business of unlocking value for our shareholders and better serving our global customer base. I am confident this proposed remedy benefits US consumers, while resolving allegations in the FTC’s complaint.”