Venator Sues Tronox over Cristal Contract
Venator Materials has started a lawsuit against Tronox in the Delaware Superior Court. The lawsuit, said Venator, is because Tronox has refused to honor a contract to pay a $75 million break fee over the sale of Cristal’s North American titanium dioxide (TiO2) business.
Tronox was required to sell the business to resolve US Federal Trade Commission (FTC) competition concerns over its merger with Cristal. An attempt to sell the assets in Ashtabula, Ohio, to Venator failed, and Tronox eventually sold the business to Ineos.
"It is unfortunate that Tronox has failed to honor its contract with Venator and offers baseless excuses for its refusal to perform. Venator at all times acted in good faith during its negotiations with Tronox,” said the company’s president and CEO, Simon Turner.
For example, Turner said, with Tronox's consent, Venator met with the FTC to make a presentation on its proposed acquisition of Ashtabula. While Venator was preparing to further respond to the issues raised by the FTC, Tronox abruptly terminated the bilateral discussions to pursue an alternative transaction. Having sold the business to a buyer other than Venator, Tronox must now pay the break fee.
Jeffry Quinn, chairman and CEO of Tronox, took a different view. Due to Venator’s failure to adhere to the terms of the Memorandum of Understanding (MoU), he said Tronox ultimately was forced to sell Cristal’s North American operations for $700 million, substantially less than was contemplated by the MoU.
“We believe that Venator’s failure to negotiate in good faith to purchase Cristal’s North American operations for $1.1 billion, as contemplated by the MoU, and its failure to otherwise comply with the MOU obviates Tronox’s need to pay the break fee,” Quinn said.
In the lawsuit, Venator is seeking a judgement for $75 million plus pre- and post-judgement interest and its “reasonable” attorneys’ fees and costs.