The recent merger agreement between Tronox and Cristal has caused quite a stir in the business world. The merger, which is expected to be completed by the end of 2018, will create one of the world`s largest producers of titanium dioxide (TiO2), a key raw material used in a variety of industries, including paints, plastics, and paper.
Tronox, a global mining and chemical company, will acquire Cristal`s TiO2 business for $1.673 billion in cash and newly issued Tronox shares. The deal also includes Cristal`s two TiO2 plants in the United States and one in Saudi Arabia.
So why is this merger important? Firstly, it will give Tronox access to Cristal`s advanced chloride technology, which is considered to be more efficient and cost-effective compared to Tronox`s current sulfate technology. This will increase Tronox`s capacity to produce TiO2 by approximately 50% and reduce its production costs.
The merger will also enable Tronox to expand its global reach and customer base. Cristal`s TiO2 business has a strong presence in Europe, the Middle East, and Asia, where Tronox currently has a limited presence. This will provide Tronox with opportunities to grow its business in new markets.
The merger has faced challenges, however. In March 2018, the Federal Trade Commission (FTC) filed a complaint to block the merger, citing concerns that it would harm competition in the North American market for chloride-based TiO2. Tronox and Cristal have been working with the FTC to address these concerns, and in April 2018, the companies agreed to divest Cristal`s TiO2 plant in Ashtabula, Ohio, to INEOS, a global manufacturer of petrochemicals, specialty chemicals, and oil products.
The Tronox-Cristal merger agreement is expected to have a significant impact on the TiO2 industry. With the combined resources of both companies, Tronox will be well-positioned to meet the growing demand for TiO2 in various industries around the world.
As with any merger, there are risks and uncertainties. However, the potential benefits of this merger for Tronox, Cristal, and the TiO2 industry as a whole make it an exciting development to watch in the coming months.