DuPont weighs Reverse Morris Trust for chemicals unit, CFO says; Tronox +6% on deal potential


DuPont (DD +0.9%) is considering alternatives to a planned spinoff of its performance chemicals unit, including a Reverse Morris Trust that could create synergies with a potential partner, CFO Nicholas Fanandakis says.

The CFO’s comments increase the chances DuPont will enter into a Reverse Morris Trust with Tronox (TROX +6%), combining the companies’ titanium dioxide assets, Alembic Global analyst Hassan Ahmed says, calculating that such a deal would almost triple the value of TROX’s net operating losses - which can be applied toward tax obligations - to $1.6B.

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Comments (4)
  • funfundvierzig
    , contributor
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    A super combination of the TIO2 assets of DuPont with those of Tronox may run afoul of the antitrust provisions of the law in the U.S. and possibly abroad. Ironically, DuPont in ditching its TIO2 business will be exiting one of the last businesses in which DuPont is still the largest and leading producer in the world

     

    Reading between the lines, DuPont's beleaguered bosses must be having trouble selling their chemicals unit (Teflon, TIO2, acids, fluorochemicals and refrigerants), given the massive legacy of liabilities, environmental, legal, and unfunded pensions, and severely cost-slashed, rundown plants and facilities. In any event, dumping chemicals will chop off $7 billion or 20% of the yearly revenues of this already dramatically shrunken conglomerate based in Delaware. ...funfun..
    21 May 2014, 04:29 PM Reply Like
  • skippy the kangaroo..
    , contributor
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    interesting the industry is consolidating , the cost of producing TIO2 is very expensive , these guys should seriously look at $ ARGEF , argex titanium ,
    25 May 2014, 01:56 AM Reply Like
  • stevedp86
    , contributor
    Comments (11) | Send Message
     
    There's got to be some more recent news on industry consolidation that we aren't hearing about...TROX is up 7% the last 5 days. Last headline was this one in May.
    17 Jun 2014, 11:09 AM Reply Like
  • funfundvierzig
    , contributor
    Comments (4399) | Send Message
     
    For some reason, buyers have not shown up to take DuPont Titanium Technologies off the hands of DuPont Management, nor for that matter the entire DuPont Performance Chemicals about to be dumped via a spin-off to DD shareholders in 2015. Perhaps the price is too high, given the huge legacy of legal liabilities, unfunded pensions, environmental hazards, and run-down plants and facilities. …funfun..
    18 Jun 2014, 08:01 AM Reply Like
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