Tronox to sell GR business
Tronox announced its intent to sell its Green River Alkali business in order to purchase another business.
According to a press release dated Feb. 21, 2017, which was on the company’s website http://www.tronox.com, “Tronox Limited (NYSE:TROX) announced a definitive agreement to acquire the TiO2 business of Cristal, a privately held global chemical and mining company, for $1.673 billion cash and Class A ordinary shares representing 24 percent ownership in pro forma Tronox. Concurrently with this announcement, the company announced its intent to begin the process to sell its Alkali business.”
David Caplan, director of communications for Tronox, elaborated on the press release saying Tronox is one of the world’s largest titanium dioxide companies and it plans on purchasing one of its competitors. In order to complete this transaction, Tronox will need the proceeds from the Alkali business sale to fund the deal.
TiO2, also known as titanium dioxide, titanium oxide, titanic oxide or titania, is a white insoluble powder that occurs naturally. It is chiefly used as a pigment of high covering power and durability, such as paint, food coloring and sunscreen.
Caplan said news of this sale was posted on the company’s website bright and early Tuesday morning, however a Tronox executive team from Pennsylvania was at the mine to talk with employees in person. Caplan said he thought the employees took the news well.
“We were the last of the (trona) companies to go through the sale process,” he said. “Tronox actually bought us from FMC Corp almost two years ago,”
Prior to that, FMC Corp owned and operated the mine for 65 years.
“I think what that says is the natural soda ash business is a very good business,” Caplan said. “When (they) have big companies wanting to buy them, it’s a good sign.”
He said not a lot of businesses can say they sell all of the product that they make, but Tronox can. Not only that, but there are enough proven trona reserves for the mine to continue producing soda ash for the next 100 years.
“This business is going to be around for a very long time,” Caplan said. “It’s been around for a long time.”
Half of the product that leaves Tronox is shipped around the world, making it a global industry. It’s great for Sweetwater County, for Wyoming and for the United States Caplan said.
As for the sale of Tronox’ Alkali business, Caplan anticipates it will take a few months for them to find a buyer.
He said since they were just sold two years ago, he expects to see some of the same companies interested again. He thinks the company will be sold by the third quarter of 2017.
He wanted to make it clear that the only reason Tronox is selling the Alkali business is because it has the opportunity to become a global giant in the TiO2 business. He said this is exactly the same scenario that happened when FMC decided to sell two years ago.
He said since the situation is so similar it seemed as though the employees were not as worried about it as much as the last sale. He said FMC Corp and Tronox both managed the company well, and he assumes the new owner will do the same.
The press release states the Tronox is in negotiations with Cristal to acquire Cristal’s 500 MMT slag production facility in Saudi Arabia. Both Tronox and Cristal’s board of directors unanimously approved the acquisition. Closing is expected to occur before the first quarter in 2018. “Tronox anticipates completing the sale of its Alkali business in the second half of 2017.”
Tronox Limited is a global leader in the mining, production and marketing of inorganic minerals and chemicals. The company’s TiO2 business operates four chemical manufacturing plants in three countries, and operates mines in South Africa and Australia. Tronox Alkali operates two trona ore mines and seven inorganic chemical manufacturing sites in the United States.