Pigments manufacturer Venator Materials has completed the sale of its iron oxide business to competitor, Hong Kong-based Cathay Industries.
The £111.7m ($140m) deal will see the Wynyard-based manufacturer receive £103.7m (£130m) cash, net of adjustments and a £39.9m ($50m) reduction in its asset-based lending facility that will improve liquidity. Venator agreed the move in November saying Cathay would be an "excellent long-term strategic owner of the business".
On the back of the deal, Cathay has rebranded as Oxerra and CEO Terence Yu said the acquisition would transform the firm's global manufacturing footprint, providing synergies and new opportunities to growth. He said: "We are thrilled to join two recognized world class leaders in the color pigment industry with an unmatched global manufacturing network across six countries on five continents. Oxerra propels us forward to provide unrivaled products and services in iron oxide and color pigment technology with sustainability across all industries."
Mr Yu added: "Our emphasis on production excellence, customer solutions, sustainability and innovation remain unchanged and are important tenets of Oxerra's culture. With this opportunity to exceed and improve upon all of these services, Oxerra can become the foremost leader in the iron oxide industry, providing a network that encompasses the globe with a concentration on sustainable, high-quality pigments for every application imaginable."
For Venator, which also operates North East sites at Birtley and Hartlepool, the disposal comes after a turbulent time in which one of its major shareholders published a searing open letter that accused the firm of being among the worst performing in its sector. In January, investor J&T MS 1 SICAV - which owns about 14.3% of the pigments producer - blamed Venator's board for a steep decline in the firm's share price since it launched on the New York Stock Exchange in summer 2017.
At the time, Venator, which reported Ebitda losses of £45.7m ($57m) in 2022, defended itself, saying it faced a number of headwinds include cost inflation and wider economic uncertainty and pointed to a number of actions it has taken in response, including a £41m ($50m) cost reduction plan.
Venator’s titanium dioxide, colour pigments, functional additives, timber treatment and water treatment products are used as ingredients in thousands of everyday items such as coatings, clothing, cars, plastics, cosmetics, paper, pharmaceuticals and building materials. The pigments and additives are known for their ability to add colour and vibrancy, reduce energy consumption, help protect the environment, and extend product shelf life.
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