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Tronox seeks permission for its pending Cristal acquisition

December 06/2018

MOSCOW (MRC) -- Tronox Limited, a global mining and inorganic chemicals company, announced it has filed a motion  with respect to its proposed acquisition of the TiO2 business of The National Titanium Dioxide Company Limited (Cristal), seeking permission to present a proposed remedy transaction to the Federal Trade Commission (FTC), said the company.

The motion outlines a proposed $700 million divestiture of the two-plant Ashtabula TiO2 complex to INEOS Enterprises A.G. (INEOS), a unit of INEOS, one of the world's largest chemicals companies and the 50th largest business in the world, with a focus on serving the developing needs of its customers from its 171 sites in 24 countries. Under the Company's proposed remedy, the Ashtabula complex, along with all of its associated assets Ц including research and development, sales, intellectual property and operations expertise Ц would be held separate during a short interim period while the proposed divestiture is pending.

"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," said Jeffry N. Quinn, president and chief executive officer of Tronox. "The proposed consent decree eliminates the competitive concerns alleged in the FTC's original complaint and it does so while providing the necessary foundation for the divested assets to be commercially successful."

Regulators in eight non-U.S. jurisdictions, including the European Union, have approved Tronox's proposed acquisition of Cristal. Approval by the FTC would allow Tronox and Cristal to close the transaction. Because the FTC took the unusual step of challenging the merger in its own administrative court, pursuant to "Part 3" of the FTC's rules and regulations, Tronox is unable to present the proposed remedy transaction to the FTC Commissioners unless consent is granted by the FTC's administrative law judge.

The motion asks the Court to make a written determination, within the five-day period provided by Rule 3.25(c), 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. Tronox's filing also requests that the FTC withdraw this matter from the Part 3 adjudication for the purpose of considering the proposed consent decree.

Under the proposed acquisition of the Ashtabula complex by INEOS, the competitive dynamics in North America would remain unchanged. Tronox's and Cristal's North American TiO2 production assets would continue to be operated by two different companies. There would be no increase in industry concentration, thereby eliminating the risks of anticompetitive effects alleged in the FTC's original complaint that initiated the Part 3 proceeding. The proposed remedy transaction would preserve the rest of Tronox's global acquisition of Cristal, which would enable Tronox to increase global manufacturing output and efficiency from Cristal's non-North American manufacturing assets, while entirely divesting Cristal's North American business to a new market entrant. Staff at the FTC have indicated that they would not recommend the proposed remedy transaction to the FTC Commissioners.
Author:Anna Larionova
Tags:dioksid titana, Cristal, Ineos, Tronox.
Category:General News
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