Feb 21 (Reuters) - Chemical maker Tronox Ltd said it would expand a business that makes titanium dioxide, a whitening pigment used in paints, with a $1.67 billion deal.
Shares of the company were up 4 percent in premarket trading on Tuesday.
Tronox is buying the titanium dioxide unit of privately held chemical and mining company Cristal.
Cristal will hold a 24 percent stake in the new Tronox, which will include the expanded pigments unit.
Tronox also plans to sell its alkali business. The unit makes natural soda ash, which is used in the production of glass, detergents, chemicals, pulp and paper.
The cash portion of the deal is expected to be partly funded through the sale of the alkali business and other non-core assets.
Cristal will also get two board seats on Tronox’s nine-member board.
Post the deal, Tronox will operate 11 titanium dioxide plants in eight countries with a total capacity of 1.3 million metric tons per year.
Credit Suisse was Tronox’s financial adviser, while Kirkland & Ellis LLP and Willkie Farr & Gallagher LLP were its legal advisers. (Reporting by Komal Khettry in Bengaluru; Editing by Shounak Dasgupta)