Tronox to Exit Non-Core Business, Sells Electrolytic Operations



Tronox exits electrolytic operations

On March 21, 2018, Tronox (TROX) announced that it will sell certain assets and liabilities of its Electrolytic Operations to EMD Acquisition. In an all-cash deal, Tronox will receive $13 million. The transaction is expected to be completed in mid-2018—subject to closing conditions. Tronox intends to exit its non-core business and focus on its titanium dioxide business.

Jeffry N. Quinn, Tronox’s president and CEO, said, “As we focus on our evolution into a leading global producer of titanium dioxide, we are pleased to find a long-term investor to purchase this non-core business.”

In another development related to the Cristal TiO2 acquisition, on March 20, 2018, Tronox received objections from the European Commission. Tronox will work with regulators towards a resolution. Tronox has until April to respond to the objections.

Update on Tronox’s stock price

The sell-off in US markets due to increasing trade wars concerns resulted in the biggest weekly decline in two years. Tronox’s stock price declined 6.2% and closed at $18.23. As a result, the stock traded 15.7% lower than the 100-day moving average price of $21.62, which indicates a downward trend in the stock. On a year-to-date basis, the stock has declined 11.1%. Chemours (CC), FMC (FMC), and W.R. Grace (GRA) fell 5.9%, 20.2%, and 13.9%, respectively. However, Tronox’s 14-day relative strength index of 40 indicates that the stock isn’t overbought or oversold.

Investors could hold Tronox indirectly by investing in the Rare Earth/Strategic Metals ETF (REMX). REMX has invested 4.6% of its portfolio in Tronox as of March 23, 2018.

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