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US Federal Government Shutdown Delays Tronox Approval Process Regarding Pending Cristal Acquisition
Friday 11 January 2019

11 January 2019 - The US federal government shutdown has also shut down is now impacting a process through which US-based mining and inorganic chemicals company Tronox Ltd. (NYSE: TROX) is seeking a key regulatory approval for its pending acquisition of the titanium dioxide business of The National Titanium Dioxide Company Ltd. (Cristal), the company said.

Tronox released an update on the status of its ongoing discussions with the Federal Trade Commission seeking approval of a proposed remedy related to the acquisition of the titanium dioxide business of The National Titanium Dioxide company Ltd. (Cristal).

Throughout the duration of the partial shutdown of the US government, agency personnel are not allowed to work on the Tronox matter, including any further consideration of the proposed remedy, since the pending acquisition is not considered an essential matter under the agency's shutdown guidelines. In addition, existing deadlines for filing motions in the matter are extended to five business days after the shutdown ends.

Previously, Tronox said it had received an Initial Decision by the Federal Trade Commission's chief administrative law judge that the proposed acquisition of the titanium dioxide business of The National Titanium Dioxide Company Ltd. (Cristal) may substantially lessen competition for the sale of chloride-based TiO2 in North America.

Tronox, Cristal and INEOS Enterprises A.G. (INEOS) will continue to work with FTC staff to advocate for the proposed remedy transaction of divesting the two-plant Ashtabula TiO2 complex to INEOS.

The companies will be allowed to engage directly with the FTC Commissioners, if necessary. Pursuant to Part 3 of the FTC's rules and regulations, the parties have not yet been able to present the proposed remedy transaction directly to the FTC Commissioners.

Under the company's proposed remedy, the Ashtabula complex and all of its associated assets –research and development, sales, intellectual property and operations expertise would be divested to INEOS and held separate during an interim period while the proposed divestiture is pending.

Tronox and Cristal's North American TiO2production assets would continue to be operated by two different companies, meaning there would be no increase in industry concentration.

This would eliminate 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, enabling 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.

Regulators in eight non-US jurisdictions, including the European Union, have approved Tronox's proposed acquisition of Cristal.

Cristal (also known as The National Titanium Dioxide Co Ltd.) operates eight manufacturing plants in seven countries on five continents and employs approximately 4,100 people worldwide.

The company is owned 79% by Tasnee (a listed Saudi joint-stock company) and 20% by Gulf Investment Corp., a company equally owned by the six states of the Gulf Cooperation Council, headquartered in Kuwait.

One percent of the company is owned by Dr. Talal Al-Shair, who also serves as vice chairman, Tasnee and chairman of Cristal.

Tasnee (also known as The National Industrialization Co of Saudi Arabia) was established in 1985 as Saudi Arabia's first joint-stock industrial company fully owned by the private sector.

Credit Suisse is acting as financial advisor to Tronox for both the Cristal and Alkali transactions and Kirkland and Ellis LLP and Willkie Farr and Gallagher LLP are Tronox's legal advisors.

Tronox Ltd. is a vertically integrated mining and inorganic chemical business. The company mines and processes titanium ore, zircon and other minerals, and manufactures titanium dioxide pigments that add brightness and durability to paints, plastics, paper, and other everyday products.

Cristal (also known as The National Titanium Dioxide Company Ltd.) operates eight manufacturing plants in seven countries on five continents and employs approximately 4,100 people worldwide.

Cristal is owned 79% by Tasnee (a listed Saudi joint-stock company) and 20% by Gulf Investment Corp. (GIC), a company equally owned by the six states of the Gulf Cooperation Council (GCC), headquartered in Kuwait.

One percent of the company is owned by Dr. Talal A. Al-Shair, who also serves as vice chairman, Tasnee and chairman of Cristal.

Tronox Ltd. is a vertically integrated mining and inorganic chemical business.

The company mines and processes titanium ore, zircon and other minerals, and manufactures titanium dioxide pigments that add brightness and durability to paints, plastics, paper and other everyday products.
Details
Date Published: 11/01/2019
Target: Cristal/TiO2,  business
Country: Saudi Arabian
Deal Size: 1.673bn (USD)
Sector: Chemicals
Type: Corporate acquisition
Financing: Cash and Stock
Status: Agreed
Vendor: Cristal
Buyer: Tronox
Buyer Advisor: Credit Suisse , Kirkland and Ellis , Willkie Farr,  and Gallagher
Comment:
to Settle EC concerns, Tronox will divest its 8120 paper-laminate product grade currently supplied to European customers from Tronox´s Botlek facility in the Netherlands

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