Tronox Ltd., the Stamford-based global mining and inorganic chemicals company, has extended its previously announced $1.7 billion agreement to acquire the titanium dioxide business of Saudi chemical and mining company Cristal.
Pursuant to the amendment, the parties agreed to extend the end date for the transaction from May 21 to June 30, with automatic three-month extensions until March 31, 2019, if necessary based on the status of outstanding regulatory approvals.
Tronox paid no extension fee for the amendment and has the right to terminate the agreement if it determines regulatory approval of the transaction is not reasonably likely to be obtained, with no fee payable for such a termination of the agreement prior to Jan. 1, 2019.
However, Tronox would be required to pay 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, or if Tronox terminates the agreement after Dec. 31, 2018 if 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 not through the ordinary litigation process in federal court, but by using its administrative process to run out the clock until the transaction agreement expires.
“Although we do not anticipate needing the full extension to consummate the transaction, the amendment provides adequate time to optimize the outcome for the benefit of our collective stakeholders ”“ our shareholders, customers and employees,” said Tronox President and CEO Jeffry N. Quinn. “We will continue to work with regulatory authorities in the United States and Europe to find an appropriate and proportionate resolution to any valid concerns.”
Tronox also posted its fourth-quarter and full-year 2017 financial results, both of which were up significantly from the previous periods. Fourth-quarter revenue was up 32 percent from the year-ago quarter to $464 million, while its titanium oxide income from operations increased more than five-fold to $93 million.
For the full year, revenue increased by 30 percent to nearly $1.7 billion. The titanium oxide segment revenue increased 30 percent to $345 million.
