STAMFORD, Conn., Dec. 5, 2017 /PRNewswire/ -- Tronox Limited
(NYSE: TROX) today said it would vigorously fight a lawsuit filed
December 5, 2017 by the U.S. Federal
Trade Commission (FTC) seeking to block the company's proposed
acquisition of the titanium dioxide (TiO2) business of
Cristal, a privately held global chemical and mining company
headquartered in Jeddah, Saudi
Arabia.
Tronox maintains that the FTC's complaint is based on an
erroneous view of the global TiO2 market and a flawed
analysis of the Tronox/Cristal transaction.
"It is extremely disappointing that the FTC has taken this
unmerited action to try to block a highly synergistic acquisition
which will enhance competition in the TiO2 industry and
benefit our customers around the world," said Tronox Chief
Executive Officer Jeffry N. Quinn.
"Our combination with Cristal is an important part of our strategy
to build a vertically integrated company that will deliver a
low-cost, secure supply of TiO2 pigment to a global
customer base."
In brief, the company maintains that the FTC has made
significant errors in its analysis of the transaction,
including:
- The FTC's case is premised on a narrow and flawed view of the
size of the TiO2 market. The commission, for example,
focuses on TiO2 produced by the chloride process, all
but ignoring TiO2 produced via the sulfate process,
thereby overlooking nearly half of the available product and
miscalculating the market share of individual producers, including
overstating the post-transaction Tronox/Cristal. Similarly, the
commission's proposed North American market ignores global trade
flows and excludes a significant amount of TiO2 imported
from Europe and Asia.
- The FTC has taken the position that the market operates as an
oligopoly, and the post-merger Tronox/Cristal will coordinate to
restrain production. In fact, the combined company will have
powerful incentives to run its pigment plants at full capacity,
regardless of the activities of competitors.
- The FTC believes the merger partners intend to cut pigment
production unilaterally. The opposite is true — the transaction
makes sense only if the combined firm can exploit all potential
synergies to safely expand production at a lower cost per ton.
Tronox first filed its Hart-Scott-Rodino notification form on
March 14, 2017. The waiting
period has been extended several times by agreement of the parties,
including after the company had fully complied with the FTC's
Second Request. During such time, Tronox fully and completely
cooperated with the FTC, diligently responding to all questions and
information requests, including producing over one million pages of
documents for its review. In its press release earlier today,
the FTC attempted to refute Tronox's prior public announcement that
the waiting period in the United
States under the Hart-Scott-Rodino Act expired at
11:59 p.m. EST on December 1, 2017 by suggesting that the FTC and
Tronox are parties to a written agreement not to close the
transaction until Tronox provided FTC staff with 10 business days'
advance notice. In fact, on October 25,
2017 (26 business days prior to December 1), Tronox provided the FTC with an
unambiguous notice of its intent to close the transaction at the
end of the statutory waiting period (which was extended to
December 1 by agreement of Tronox and
Cristal), assuming all other conditions to closing were satisfied
as of that date.
Mr. Quinn stated: "The FTC bears the burden of proving to a
court that this transaction violates the law. While we are always
willing to consider appropriate remedial action to address the
commission's concerns, we maintain the transaction should be
allowed to proceed and are fully prepared to defend our position in
court."
About Tronox
Tronox Limited is a vertically integrated mining and inorganic
chemical business. The company mines and processes titanium ore,
zircon and other minerals, and manufactures titanium dioxide
pigments that add brightness and durability to paints, plastics,
paper, and other everyday products. For more information,
visit tronox.com.
About Cristal
Cristal (also known as The National Titanium Dioxide Company
Limited) operates eight manufacturing plants in seven countries on
five continents and employs approximately 4,100 people worldwide.
Cristal is owned 79 percent by Tasnee (a listed Saudi
joint-stock company) and 20 percent by Gulf Investment Corporation
(GIC), a company equally owned by the six states of the Gulf
Cooperation Council (GCC), headquartered in Kuwait. One percent of the company is
owned by Dr. Talal Al-Shair, who
also serves as vice chairman, Tasnee and chairman of Cristal.
Media Contact: Bud Grebey
Direct: +1.203.705.3721
Mobile: +1.203.219.5222
Investor Contact: Brennen
Arndt
Direct: +1.203.705.3722
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SOURCE Tronox Limited