Tronox Incorporated and Exxaro Resources Limited today announced a definitive agreement under which Tronox will acquire Exxaro's mineral sands operations in exchange for a 38.5 per cent equity stake in Tronox.
Exxaro is a South African-based resources group with a variety of interests, including iron ore and coal. Its mineral sands operations produce the key titanium bearing ore feedstock used in the production of titanium dioxide pigment - an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products.
Headquartered in Oklahoma City in the United States, Tronox is among the largest producers and marketers of titanium dioxide pigment globally.
"This transaction combines Tronox's best-in-class pigment production operations and leading proprietary technology with Exxaro's highly technical expertise and globally competitive mineral sands operations to create a uniquely differentiated platform with the ability to outperform through all points of the business cycle,” said Dennis L. Wanlass, chief executive officer of Tronox.
“This strategically compelling combination provides flexibility and manageability of an important raw material source and firmly positions the combined entity as a highly efficient, vertically integrated pigment company.
"We are very pleased to expand our footprint into South Africa and have a great deal of confidence in the business environment created by the South African government,” he continued. “We look forward to working with the highly skilled employees in South Africa who will be joining us as part of this transaction, and to the new growth opportunities that this transaction will offer.”
"An integrated model has always been part of Exxaro's mineral sands strategy,” said Exxaro's chief executive officer Sipho Nkosi. “The combined company should realize significant cost benefits and efficiency improvements and it provides a platform for future global growth in pigment production.
"The transaction will improve the future potential for South Africa to be chosen as a site for a potential new greenfield pigment plant as the demand increases and growth strategies are formulated," he added.
The transaction, which has been approved by the boards of directors of both companies, is expected to close in the first half of calendar 2012, subject to the SEC registration timeline, Tronox shareholder approval, customary regulatory approvals and other closing conditions.
