2.	Cristal Acquisition

On April 10, 2019 (“Cristal Transaction Date”), we announced the completion of the acquisition of the TiO₂ business of Cristal for $1.673 billion of cash, subject to a working capital adjustment, plus 37,580,000 ordinary shares (the “Cristal Transaction”). The total acquisition price, including the value of the ordinary shares at $14 per share on the closing date of the Cristal Transaction, is approximately $2.2 billion, subject to a working capital and noncurrent liability adjustment.

In order to obtain regulatory approval for the Cristal Transaction, the Federal Trade Commission (“FTC”) required us to divest Cristal’s North American TiO₂ business to INEOS Enterprises (“INEOS”). On May 1, 2019, we completed the divestiture transaction and received proceeds of approximately $700 million, subject to a working capital adjustment. In addition, the previously announced divestiture of the 8120 paper laminate grade to Venator Materials PLC (“Venator”), which we were required to undertake by the European Commission in order to consummate the Cristal Transaction was completed on April 26, 2019. Under the terms of the agreement, we will supply the 8120 grade product to Venator under a supply agreement for an initial term of 2 years, and extendable up to 3 years, to allow for the transfer of the manufacturing of the 8120 grade to Venator. Total cash consideration is 8 million Euros, of which 1 million Euros was paid at the closing and the remaining 7 million Euros will be paid in equal installments during the second quarters of 2020 and 2021. As a result of consummating the sale, we expect to record a loss of approximately $19 million during the second quarter of 2019.

Initially, we intended to divest Cristal’s North American operations to Venator. When we announced the divestiture of the 8120 Grade to Venator on July 16, 2018, we also announced that we had entered into a binding Memorandum of Understanding (“MOU”) with Venator providing for the negotiation in good faith of a definitive agreement to sell the entirety of Cristal’s North American operations to Venator if a divestiture of all or a substantial part of Ashtabula was required to secure final FTC regulatory approval for the Cristal Transaction. The MOU granted Venator exclusivity for a period of 75 days to negotiate a definitive agreement for the sale of the entirety of the Ashtabula complex. The MOU also provided for a $75 million break fee if, among other things, the parties, despite negotiating in good-faith and in conformity with the terms in the MOU, failed to reach a definitive agreement for the sale of Cristal’s North American operations and Tronox was able to consummate both the Cristal Transaction and the paper-laminate grade divestiture to Venator. See Note 16 for a further discussion of the $75 million break fee.

We funded the Cristal Transaction through existing cash, borrowings from our Wells Fargo Revolver, and restricted cash borrowed under the Blocked Term Loan which became available to us upon the consummation of the Cristal Transaction. See Note 12 for further details of the Cristal Transaction financing. We will account for the Cristal Transaction under ASC 805, Business Combinations, which requires recording assets and liabilities at fair value. Under the acquisition method of accounting, each tangible and separately identifiable intangible asset acquired and liabilities assumed will be recorded based on their preliminary estimated fair values on the Cristal Transaction Date.