Several major titanium dioxide companies in the world are trying to reorganize their assets to promote the US$2.4 billion acquisition of Cristal by Tenova, which may be the last major consolidation in the titanium dioxide industry.
The Western countries' titanium dioxide industry has been integrated into five major companies – Chemour, Tenova, Venator, Koster and Kronos Worldwide. According to an investor report released by Venator in June 2018, this accounted for 54% of global titanium dioxide production capacity. about.
In order to obtain approval from the US and EU regulators for the acquisition of the Koster Titanium Dioxide business, Teno is conducting two separate transactions to divest some assets to the UK's Venator. In the US, Tenova has signed a memorandum of understanding to Coase Two sets of titanium dioxide units with a total capacity of 245,000 tons/year in Ashtabula, Ohio, are sold to Venator. Ashtabula is Kostrom's only production base in the United States and the world's largest producer of titanium dioxide.
In the option-based transaction, Teno will have the right to ask Venator to acquire the Ashtabula Titanium Dioxide Factory in case the US releases a preliminary ban on the acquisition of Koster. Tenova said that the price of Venator's acquisition of Ashtabula Titanium Dioxide Plant will depend on Teno. The progress of the approval process for the Koster acquisition in the United States.
Analysts generally agree with Teno's approach. 'We believe this is a positive action, eliminating some of the uncertainty of the deal and the stock.' Wells Fargo analyst Frank Mitch said, 'Before conservative estimate of the Teno deal Revenue is about $800 million. If Teno sells the Ashtabula Titanium Dioxide Factory to Venator for $1.1 billion, it will acquire the remaining assets of Koster with approximately 3.5 times the EBITDA. For the case of Novo, this will be a huge victory, to acquire most of the Koster assets at such a low valuation to further consolidate its titanium dioxide business. For Venator, the deal is also very cost-effective, because it has obtained a copy The main titanium dioxide asset. '
Hassan Ahmed, an analyst with Alanbic Global Consulting, said: 'We believe that this announcement is a win-win for all parties involved, and the market prefers certainty. This is the completion of Cosmo for the company. The special acquisition provides a clear path. '
If Venator successfully purchases Ashtabula assets, then Kronos may also participate in the reshuffle of industry assets. 'If the Ashtabula asset transaction is going to take place, Venator will have to go through the antitrust process because it is a 50% stake in the Charles Lake Chloride Titanium Dioxide Factory. Owner. If the acquisition is successful, Kronos will be interested in buying Venator's 50% stake in the Charles Lake Chloro Titanium Dioxide Factory. ' Wells Fargo analysts said.
In a separate transaction, Teno has signed a definitive agreement to sell its 8120 paper laminate grade titanium dioxide business to Venator, and the acquisition amount has not been disclosed. The European Commission said in early July that it has approved Teno on Koster The acquisition, on the condition that Teno divested a business. Tenova has sold its paper laminates for titanium dioxide business worldwide. The EU said that after this part of the business of Teno, its acquisition agreement for Koster will not Then cause competition concerns.