Apollo reported to be in US$4 bn takeover of Tronox

Apollo reported to be in US$4 bn takeover of Tronox

Private equity firm Apollo Global Management has made an offer for a takeover of the world’s leading integrated manufacturer of titanium dioxide pigment, Tronox Holdings, in a US$4.3 billion all-cash, according to a Reuters report.

Apollo has offered US$27 per share to buy Connecticut-based Tronox, according to sources who said Tronox has hired consultants to consider the bid and its next course of action is yet to be decided.

Tronox was spun out of Kerr-McGee Corp in 2005, and in 2019 it acquired the titanium dioxide business of Saudi Arabia’s National Titanium Dioxide Co Ltd from Tasni, Saudi Arabia. Tasani, through a subsidiary, is now Tronox’s largest shareholder with a 24% stake.

Tronox makes titanium dioxide (TiO2) pigment and other chemicals used to add brightness and durability to paints, plastics and paper.

In its second quarter results posted in July, the firm reported record revenue of US$927 million, increased 60% compared to US$578 million in the same period last year, driven largely by improved sales volumes and average selling prices across all products. The revenue has been driven primarily by 5% higher TiO2 average selling prices and 5% higher zircon average selling prices.

It said TiO2 sales volumes increased 1% sequentially, driven by continued recovery led by North America and Europe.

But the company also cautioned that TiO2 sales volumes are expected to decline 5-10% from record second quarter levels, due to supplier and logistics constraints.

As a vertically integrated producer of titanium dioxide and inorganic chemicals, Tronox mines and processes titanium ore, zircon and other materials and manufactures TiONA and TiKON titanium dioxide pigment, specialty-grade CristalACTiV titanium dioxide products and high-purity titanium chemicals. It has 6,500 employees across six continents.

Sources cautioned that there is no certainty that Tronox will agree to any deal and both companies declined to comment.


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