1 September 2009

Huntsman deals for Tronox units

Chemical company Huntsman Inc. will pay $415 million for Tronox Inc.'s titanium dioxide and electrolytics businesses.

The Woodlands, Tex.-based Huntsman Inc. signed a “stalking horse” agreement with Oklahoma City-based Tronox Inc., which filed for bankruptcy protection in January.

A “stalking horse” agreement means other companies may submit competing bids for Tronox’s assets before a bankruptcy court auction, which will likely take place in the fourth quarter of this year.

The assets Huntsman would acquire include titanium dioxide facilities in the Netherlands and the U.S., a joint venture interest in an Australian operation and electrolytic production facilities in the U.S.

The deal will make Huntsman the world’s second largest maker of a whitener used in products as diverse as food, plastics, and paint.

If Huntsman succeeds with its bid, the combined company will be the second-largest titanium dioxide producer, with 17% of the market. Wilmington, Del.-based Du Pont & Co. would remain the top producer, with 23% share.

Tronox is the world’s fourth-largest producer of titanium dioxide pigment, making 535,000 metric tons annually. Huntsman’s pigment division makes about 560,000 metric tons of the pigment a year.

Titanium dioxide is an inorganic white pigment used to whiten such diverse materials as paint, coatings, plastics, printing ink and paper, cosmetics, and food. Huntsman also makes chemicals for the consumer goods, construction, health care, paints, and aviation sectors, among others.

Tronox filed for bankruptcy protection to address legacy liabilities it incurred when its former parent, Kerr-McGee Corp., spun it off in 2006.

For related information, go to www.isa.org/productivity.