Huntsman will acquire Rockwood's performance additives and titanium dioxide (TiO2) businesses. Under the terms of the agreement Huntsman will pay approximately $1.1 billion in cash and assume unfunded pension liabilities estimated at $225 million as of June 30, 2013. The acquisition makes Huntsman the No. 2 player in the TiO2 and inorganic color pigments industry.
Rockwood's Performance Additives and TiO2 business includes the manufacture and supply of sulphate process TiO2, synthetic iron-oxide and other organic pigments, timber treatment products and specialty automotive materials. Applications for these products are used in coatings, construction, concrete, plastics, papers, inks, food, cosmetics, pharmaceuticals, fibers and films.
"This acquisition provides a unique opportunity to unlock value within our pigments business and builds on the strong improvements we have made to its competitiveness," explained Peter R. Huntsman, president and CEO of Huntsman Corporation. "With this combination we will be better positioned to serve customers through a broader product range including color pigments, functional additives and specialty TiO2 pigments. We will become the second largest global producer of TiO2 and inorganic color pigments."
Within two years of the close of the Huntsman-Rockwood deal, Huntsman will issue a public offering of the combined pigments business.
"In addition to creating a $3 billion pigments leader, we believe this public offering will allow greater investor focus and appreciation for our differentiated businesses," explained Huntsman. "These remaining divisions continue to enjoy record financial performance and global growth. We are well on our way to capturing the previously announced $220 million in annual savings through restructuring in our existing business and we have a number of capital projects underway that will increase our future earnings potential. Reducing our financial leverage remains a priority and we expect to return to our debt/EBITDA target ratio of 2 to 2.5 times by 2015."
Huntsman To Purchase TiO2 Business of Rockwood
Published September 17, 2013
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