US FTC Blocks Tronox-Cristal Deal
The US District court for the District of Columbia on Sept. 5 granted a request by the Federal Trade Commission (FTC) for a preliminary injunction blocking Tronox’s proposed acquisition of Saudi Arabian titanium dioxide (TiO2) maker Cristal.
The court’s decision was released under seal, with the full decision expected to be issued early in the week of Sept. 10.
Tronox said it intends to “promptly” file a notice of appeal and request an expedited hearing of its appeal to reverse the court’s action. The Connecticut-headquartered group will also consider whether to proceed with the sale of Cristal’s plant in Ashtabula, Ohio, USA.
On Jul. 16, Tronox entered into a binding Memorandum of Understanding (MoU) with Huntsman spinoff Venator Materials to sell the Ohio complex, should this be necessary to close the deal with Cristal. The MoU gives Venator exclusivity until Sept. 29 to negotiate a definitive agreement.
Expressing his disappointment with the court’s decision, Tronox’s president and CEO, Jeffry Quinn, said the company has valuable alternatives to consider, including not only the Ashtabula sale. It also must wait for a decision by the FTC’s Administrative Law Judge in the Part 3 Procedure.
“During the Part 3 Procedure,” Quinn commented, “I believe we convincingly demonstrated that the FTC’s objections to the Cristal transaction are entirely misplaced and this highly synergistic transaction will significantly increase production of TiO2 to the benefit of customers in North America and around the world.”
The FTC first objected to the acquisition last year on concerns the merger would reduce competition. European regulators, however, cleared the deal last month, on condition that Tronox sell its paper laminate grade of TiO2 to Venator.