If they do buy Kronos then Tronox will have almost 20 percent of the TIO2 market. The article below is from today Wallstreet Journal
"Shares in titanium dioxide producer Kronos Worldwide Inc. closed up 8% Monday, with Citigroup credit analysts stating the company is now a “more likely acquisition target” following the weekend passing of billionaire Harold Simmons.
Mr. Simmons’s Contran Corp. controls 80.6% of Kronos directly and through its stakes in Valhi Inc. and NL Industries Inc.
Citi’s James Finnerty told clients in a note Monday that Kronos, which currently sports a market value of $2.2 billion, could be a target for Tronox Ltd. The combined entity would account for 19% of global titanium dioxide capacity. Titanium dioxide, or TiO2, is a pigment often used to add whiteness to products like toothpaste, paint and paper.
An offer could be partially funded by a seven-year $1.5 billion term loan that Tronox secured in March, with around $700 million used to pay down existing debt.
“We’re actively evaluating opportunities, we haven’t identified anything specifically but if we do a deal or a partnership, we would hope to be able to announce it in the first quarter of 2014. Any deal will be calculated and in the best interest of our shareholders,” said a Tronox spokesman.
On its second quarter earnings call in August, Tronox Chairman and Chief Executive Officer Tom Casey said that the company’s “intention would be to return the unused portion…to the creditors who lent it to us,” if the funds hadn’t found a useful application by March 2014.
Separately, Citi’s Mr. Finnerty believes Tronox may become more aggressive in its pursuit of mergers and acquisitions due to tax benefits arising from a legal ruling earlier this month, which the company said could potentially amount “to hundreds of millions of dollars annually.”
Kronos did not return calls for comment."
