Opposition is mounting to Tronox Ltd.’s $1.7 billion agreement to acquire the titanium dioxide business of Saudi chemical and mining company Cristal. Already facing resistance from the Federal Trade Commission, the European Commission has now added a Statement of Objection to the proposed deal.
The Stamford-based global mining and inorganic chemicals characterized the EC’s objection as a “preliminary assessment” that “does not prejudge the outcome of the investigation and/or the need to offer any particular remedy.”
“The Statement of Objections further details and clarifies the commission’s position, and receipt of it establishes a defined framework to move forward,” said Tronox President and CEO Jeffry N. Quinn. “We continue in constructive dialogue and I am confident we can determine an appropriate and proportionate resolution to any valid concerns of the Commission.”
Tronox must respond to the objections by early April.
Earlier this month Tronox and Cristal agreed to extend the end date for the transaction from May 21 to June 30, with automatic three-month extensions through March 31, 2019, depending on the status of outstanding regulatory approvals.
Tronox will be hit with a termination fee of $60 million if either party terminates the agreement on or after March 31, 2019 due to failure to obtain regulatory approval. The same fee applies if Tronox terminates the agreement after Dec. 31, 2018 because it determines regulatory approval is not likely to be obtained.
The Stamford firm sued the Federal Trade Commission in January, maintaining that the FTC has been trying to prevent the deal by using its administrative process to run out the clock until the transaction agreement expires.