Several major titanium dioxide companies in the world are trying to restructure their assets to promote Tronox’s $2.4 billion acquisition of Cristal, a major consolidation in the titanium dioxide industry.

The Western countries’ titanium dioxide industry has been integrated into five major companies – Como, Teno, Venator, Koster and Kronos Worldwide. According to an investor report released by Venator in June 2018, this accounted for about 54% of global titanium dioxide production capacity.

In order to obtain approval from the US and EU regulators for the acquisition of the Koster titanium dioxide business, Teno is conducting two separate transactions, stripping some assets to the UK’s Venator. In the United States, Tenova signed a memorandum of understanding to sell two sets of titanium dioxide units with a total capacity of 245,000 tons per year from Koster’s Ashtabula, Ohio, to Venator. Ashtabula is Kostrom’s only production base in the United States and is the world’s largest producer of titanium dioxide.

In the option-style transaction, Teno will have the right to ask Venator to acquire the Ashtabula Titanium Dioxide Factory in case the US releases a preliminary ban on the acquisition of Koster. Teno said that the price of Venator’s acquisition of Ashtabula Titanium Dioxide Plant will depend on Teno’s progress in the US approval process for the Koster acquisition

Analysts generally agree with Teno’s approach. “We believe this is a positive move that has eliminated some of the uncertainty in the deal and the stock,” said Frank Mitch, an analyst at Wells Fargo. “The previous conservative estimate of Teno’s trading revenue was about $800 million. If Teno The $1.1 billion sale of the Ashtabula Titanium Dioxide Plant to Venator will acquire the remaining assets of Koster with approximately 3.5 times the EBITDA. For Teno, this will be a huge victory. The acquisition of most of Koster’s assets at such a low valuation to further consolidate its titanium dioxide business. For Venator, the deal is also very cost-effective, as it has acquired a major titanium dioxide asset.”

Hassan Ahmed, an analyst with Alanbic Global Consulting, said: “We believe that this announcement is a win-win for all parties involved, and the market prefers certainty. This is the completion of Cosmo for the company. The special acquisition provides a clear path.”