Tronox Inks Deal to Acquire FMC Alkali

Tronox Ltd of Stamford, CT has signed a definitive agreement with FMC Corp of Philadelphia, PA to acquire its Alkali Chemicals business for US$1.64 billion. Tronox says it will fund the transaction, expected to close in the current quarter, through existing cash (about US$1 billion) and new debt (US$600 million) provided by UBS Investment Bank, Credit Suisse and RBC Capital Markets. Tom Casey, Tronox’s CEO, said, “We are very pleased to welcome Alkali Chemicals to Tronox. Together, we will form a leading inorganic chemicals company with more stable revenue, cash flow EBITDA streams and higher net income. We will have approximately US$2.6 billion in sales with the scale, stability and financial strength to pursue our strategic growth initiatives. We will operate Alkali Chemicals as a separate business unit and reporting segment.” Alkali Chemicals is the world’s largest producer of natural soda ash at Green River, WY. The Green River facilities have the annual capacity to produce 4.85 million tons of soda ash, 90,000 tons of sodium bicarbonate, and 65,000 tons of caustic soda. The business is also a partner in Natronx Technologies LLC with Church & Dwight Co Inc and Tata Chemicals (Soda Ash) Partners. The partnership manufactures and markets sodium-based, dry sorbents for air pollution control. Following the sale, FMC Minerals will be renamed FMC Lithium. FMC Minerals generated 2014 operating earnings of US$166.7 million on revenue of US$1.0 billion, increases of 30% and 7%, respectively from 2013. The earnings improvement was attributed to higher prices, record soda ash production and improved lithium operations, partially offset by an increasing cost environment in Argentina. Pierre Brondeau, FMC’s CEO, said, “We are very pleased to sell our Alkali Chemicals business to a leading, global mining and minerals company like Tronox. This is a natural fit for Alkali Chemicals, which will thrive as a new, strategic business at Tronox. This transaction allows FMC to maintain a strong balance sheet as our company focuses on global agriculture, health and nutrition with a portfolio that concentrates on high-growth markets.” Tronox mines and processes titanium ore, zircon and other minerals, and manufactures titanium dioxide pigments. The company also produces electrolytic and specialty chemicals including electrolytic manganese dioxide, sodium chlorate, boron trichlroide, elemental boron, and lithium manganese dioxide.

Volume 29 issue 3

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