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Unit of Saudi's Tasnee sells titanium dioxide business in $1.67bn sale

Cristal, whose shares are majority owned by the Tadawul-listed chemicals giant, will sell US TiO2 assets to American firm Tronox

Tasnee subsidiary Cristal has sold its US titanium dixoxide business to US chemicals giant Tronox for $1.67bn [representational image].
Tasnee subsidiary Cristal has sold its US titanium dixoxide business to US chemicals giant Tronox for $1.67bn [representational image].

Cristal, the majority-owned subsidiary of Saudi-based Tadawul-listed National Industrialisation Company (Tasnee), has sold its North American titanium dioxide (TiO2) assets to US chemicals giant Tronox for $1.67bn (SAR6.26bn).

According to a Saudi bourse missive, the transaction closed on 10, April 2019 following the green light from the US Federal Trade Commission (FTC).

Under the deal, Cristal – which is 79% Tasnee-owned – will receive a cash consideration of $1.67bn (SAR6.26bn) and a 24% equity position in Tronox.

Tasnee said cash received will be “substantially used to fully prepay the outstanding bank debt of Cristal, which is consolidated in Tasnee’s consolidated financial statements”.

The two directors of Tasnee’s Board, Talal Ali Al Shair – in his personal capacity – and Mr. Ibrahim Al Qadi – as the representative of Gulf Investment Corporation – own 1% and 20% of Cristal shares, respectively.

The remaining shares are owned by Tasnee, which added that any further material developments pertaining to the transaction will be announced “in due course”.

Speaking on the move, Mutlaq H. Al-Morished, chief executive officer of Tasnee, said: “This transaction enables Cristal and Tronox to position the combined businesses for long-term success in the [TiO2] global industry that will benefit from a fully integrated global asset base and derive significant synergies.

“This also allows Tasnee to focus on its petrochemical assets, downstream business and other strategic business development opportunities, while substantially deleveraging its consolidated balance sheet.”

The deal has been two years in the making after it was originally announced in February 2017.

However, according to Reuters, the FTC said in December 2017 that it would go to court to block the deal, arguing that two of the three top suppliers of chloride process titanium dioxide.

Acording to an FTC statement, the agreed merger is agreed on the prerequisite that, among other requirements, Tronox sells titanium dioxide producing facilities in Ashtabula, Ohio.

Uses for the chemical include paint and plastics production, as well as for industrial coatings.

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