Kemira Oyj and Rockwood Holdings Inc. have announced a joint venture to merge their titanium dioxide and functional additives businesses, enhancing market position and operational synergies.

Target Company Overview

Kemira Oyj and Rockwood Holdings Inc. have entered into a strategic joint venture, combining both companies' titanium dioxide (TiO2) operations along with Rockwood's functional additives division. This transaction values Kemira’s titanium dioxide business at over EUR 250 million and is anticipated to generate a minor capital gain for Kemira. Furthermore, the deal is projected to positively impact cash flow and decrease Kemira’s net debt by approximately EUR 120 million. The completion of this transaction awaits approval from competition authorities and is expected to finalize in the third quarter of 2008.

The newly established joint venture will encompass Rockwood’s titanium dioxide pigments and functional additives divisions, which include production facilities in Duisburg, Germany. It will also incorporate Kemira’s titanium dioxide business, featuring its production plant in Pori, a technical research center specializing in TiO2 products in Oberhausen, Germany, as well as its U.S. subsidiary, Kemira Specialty, Inc. Kemira’s titanium dioxide operations reported a turnover of around EUR 230 million in 2007, with an operational EBITDA slightly below 14%.

Industry Overview in Germany

The titanium dioxide industry is a crucial segment of the global chemicals market, primarily utilized as a pigment due to its high opacity and brightness. In Germany, this sector has witnessed consistent demand across various applications, includi