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Genesis Energy to buy Tronox’s Alkali business for $1.32bn

EBR Staff Writer Published 03 August 2017

Houston-based Genesis Energy has agreed to acquire the Alkali Chemicals business of US chemical company Tronox for a sum of nearly $1.32bn.

The Alkali Chemicals business of Tronox comprises the trona and trona-based exploring, mining, processing, producing, marketing and selling operations.

It is claimed to be the largest producer of natural soda ash in the world. Tronox says that it is selling Alkali Chemicals to focus more on its titanium dioxide business.

Tronox CEO Peter Johnston said: “Genesis' proposal was the most compelling for its overall value, with its combination of price, favorable contract terms, speed to closing, committed financing, and expected ease of regulatory approvals. 

“These considerations, in aggregate, provided the highest level of certainty to Tronox.  We anticipate being able to close this transaction prior to our planned closing of the Cristal TiO2 acquisition.”

The Alkali Chemicals business has an annual production of nearly four million tons of natural soda, which marks about 28% of all the natural soda ash produced in the world as per Genesis.

It says further that based on existing production rates, the business still has an estimated reserve life of more than 100 years.

Genesis CEO Grant E. Sims said: “The business is a great strategic fit with our current asset base and shares many characteristics with our existing refinery services business. It is a market leader with high barriers to entry, and generates stable and predictable cash flow, with production sold out each of the last seven years and an estimated EBITDA for the last twelve month period ending June 30, 2017 of $166 million.”

Subject to customary closing conditions which include receipt of regulatory approvals, the transaction is likely to be completed in the second half of the year.


Image: The Alkali Chemicals business has an annual production of nearly four million tons of natural soda. Photo: courtesy of stockimages/Freedigitalphotos.net.