Chemical giant Tronox plans $1.67bn deal for Saudi's Cristal

Deal would make Tronox the world's largest producer of titanium dioxide with total capacity of 1.3m tonnes per year

(Image: Tronox.com)

(Image: Tronox.com)

Chemical maker Tronox Ltd announced plans on Tuesday to buy the titanium dioxide business of Cristal, a subsidiary of Saudi Arabia's Tasnee, for $1.67 billion cash and new shares.

The deal would make Tronox the world's largest producer of the whitening pigment, operating 11 titanium dioxide plants in eight countries with total capacity of 1.3 million tonnes per year.

Cristal will hold a 24 percent stake in the new Tronox, which will include the expanded pigments unit.

The deal will help Cristal pay its outstanding bank debt of $1.673 billion in Saudi Arabia, Tronox said in a statement.

Those banks include The Saudi British Bank, an affiliate of HSBC Holdings, Banque Saudi Fransi, Riyad Bank and Alawwal Bank, Mutlaq al-Morished, the CEO of Tasnee told Al Arabiya TV.

"We have reached this agreement through a comprehensive evaluation of the entire assets of Cristal. We preferred to get just the equivalence of the value of the debt of Cristal while the remaining value of the deal will be transferred into shares."

Tronox said the cash portion of the deal is expected to be partly funded through the sale of the alkali business and other non-core assets.

Tronox expects the deal to close before the first quarter of 2018, subject to regulatory approvals, it said.

Cristal will also get two of Tronox's nine board seats.

Credit Suisse was Tronox's financial adviser. Kirkland & Ellis LLP and Willkie Farr & Gallagher LLP were its legal advisers.

Tronox said it intends to acquire Cristal's titanium slag production facility in Jizan, southern Saudi Arabia.

Cristal is owned 79 percent by Tasnee and 20 percent by Gulf Investment Corporation (GIC), which is equally owned by the six states of the Gulf Cooperation Council (GCC) and is headquartered in Kuwait.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

NOTE: Comments posted on arabianbusiness.com may be printed in the magazine Arabian Business

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Features & Analysis
Saudi Arabia spends money to make money

Saudi Arabia spends money to make money

Tour of Asia by Saudi Arabia's King Salman advances drive to...

Q&A: The laptop ban and what it means when flying from Dubai and Abu Dhabi

Q&A: The laptop ban and what it means when flying from Dubai and Abu Dhabi

Couldn't a laptop with a bomb inside still pose a danger within...

Railways are huge priority for the GCC

Railways are huge priority for the GCC

Rail has the potential to dramatically affect Gulf economies...

Most Discussed
sponsoredTracking