Recently, the twists and turns of the Tenocost acquisition finally saw the dawn, the European Commission announced the approval of the transaction, the successful acquisition will be born the world's largest titanium dioxide company. The European Commission first objected to the case after approval, it is obvious that the acquisition The process is difficult.
Teno issued an announcement in February 2017, announcing that it will acquire Saudi Koster's titanium dioxide business for $1.673 billion in cash. Later, Teno and Koster submitted project applications to regulators in various countries, hoping to pass through various countries. Review, smooth mergers and acquisitions. So far, the case has been reviewed by China, South Korea, Saudi Arabia, New Zealand, Turkey, Australia, Colombia and the European Union. However, the EU has just begun to obstruct the same as the United States.
Considering the European market, the biggest entanglement of the European Commission is the 'monopoly'. The consumption of titanium dioxide in Europe and the United States accounts for more than 35% of the world. The main producers of titanium dioxide in Europe and America are Chemu, Teno, Koster, Venator ( The original Huntsman pigments business, Connors. The acquisition involves leading companies in the titanium dioxide industry. They are worried that the merger will create a market monopoly and even cause indispensable titanium dioxide products in coating raw materials. Prices are rising. Moreover, this is also a challenge for local suppliers. In the face of market monopoly, they may be forced to withdraw from the market. If a vicious circle is formed, this will eventually disrupt the European titanium dioxide market. Currently, the merger is released by the European Union. It should be the commitment of Teno and Koster to not form a monopoly, keep the price of the product still competitive, and not reduce the market suppliers.
The United States became the last hurdle of the acquisition. Unlike other countries that have already approved the stipulations, the United States has consistently opposed and delayed attitudes. The US Federal Commission filed a complaint with the US government in December last year, demanding that Teno stop the acquisition. From the market analysis, Their objections are understandable. If the company acquires Koster, the new company and another top supplier, Como, have more than 80% of the North American chlorinated titanium dioxide production capacity, which is enough to monopolize the titanium dioxide in the North American market. Sales. This may be the most important factor in the US Federal Trade Commission's opposition to the acquisition.
Even so, the two parties still insist on the original intention. In order to cope with various obstacles, they even agreed to extend the trading period. The two parties agreed to extend the closing date of the transaction from May 21, 2018 to June 30, 2018, and If necessary, it will also have the right to repeat the automatic extension for 3 months until March 31, 2019. This shows the determination of both parties to the acquisition. Although the acquisition is difficult, the world titanium dioxide giant may still be born.