Tronox has abandoned its attempt to buy a supply chain business following 海角视频 anti-competition fears.
The chems giant agreed to buy Nowegian chloride slag producer TiZir Titanium and Iron for £246 million last May - eyeing up supply into the huge South Humber Bank site.
It was called in, and the Competitions and Marketing Authority has now rejected a remedy proposal. With it set to move to a phase two investigation, the deal with Erament has been canned.
The CMA had expressed concerns that with Tronox taking TiZir in-house, it would leave only Rio Tinto on the open market.
Jean-François Turgeon, co-chief executive of the titanium dioxide producer, said: "We are disappointed with the rejection of our remedy proposal and respectfully disagree with the view taken by the CMA.
"While TTI was an asset that would have furthered our vertical integration strategy, the decision to terminate the agreement reflects the fact that under the CMA's rules, we could not have obtained regulatory approval prior to the termination date under the agreement with Eramet.
“We are currently building significant momentum in the market and are already well-positioned to execute on our strategic plans with our existing portfolio today. We will continue to leverage our vertical integration and sourcing strategy to supply our pigment feedstock requirements and remain focused on our efforts to bring the Jazan smelter online."
It has triggered a £13.2 million ($18m) break clause in favour of Eramet.
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John D Romano, fellow co-chief executive, said: “We remain confident that our vertical integration strategy will continue to provide a competitive advantage, allowing Tronox to deliver reliable, safe, quality, low-cost, sustainable tons to our customers while outperforming our TiO2 peers. The TiO2 business continues to benefit from the global industry recovery in 2021. With the current momentum, we are very optimistic about the short-, medium-, and long-term potential for both TiO2 and Tronox as the leading integrated supplier in the industry.”
The company will now make a £221 million ($300m) discretionary debt repayment before the end of the quarter - cash that had been earmarked for the deal.
On the fourth quarter, Mr Turgeon added: "Due to the positive dynamics in the market, we delivered an even stronger fourth quarter than we previously contemplated, with sales exceeding expectations and adjusted EBITDA coming in above our previously issued guidance.
“We expect fourth quarter 2020 revenue of $783 million (£578m) and adjusted EBITDA of $200 (£147) to $204 million (£150m), our strongest adjusted EBITDA performance since we closed the Cristal acquisition.
“This performance was driven by a continued demand recovery in the fourth quarter (up eight per cent) as well as delivery on our synergy targets from the Cristal transaction.
“We remain very confident in our ability to deliver industry leading results and are well-positioned to continue our participation in the recovery and demonstrate the full capabilities of our vertically integrated portfolio."