The merger of Saudi private chemicals company Tasnee’s titanium dioxide unit Cristal and US titanium products manufacturer Tronox is set to miss the original deadline of June 2018, due to the approvals process in the US.

Tasnee’s CEO Mutlaq al-Morished tells MEED that he expects the merger agreement with Tronox to be ratified by the US Federal Trade Commission (FTC) by the end of this year, as the FTC is currently functioning with just two members of a total of five.

The administration of President Donald Trump reportedly only named the other FTC nominees last month, on which the US Congress is yet to vote.

“We [Tasnee and Tronox] have been able to make our case to just two out of the five members, who are Democrats from [previous US president Barack] Obama’s time,” Al-Morished says.

Riyadh-based Tasnee and Tronox first announced merger plans in February 2017. As per the terms of the deal, Tasnee is to sell its 79 per cent stake in Cristal to Tronox for $1.673bn in cash and control of 24 per cent shares in the combined company.

At the time of announcing the deal, Tasnee told the Riyadh Stock Exchange (Tadawul), where it is listed, that it expected the deal to be approved by market regulators in Europe and the US in 15 months, or by June this year.

However, aside from dealing with an incomplete FTC, Tronox is also having to battle the US commerce watchdog’s moves to block the deal with Tasnee on antitrust grounds, reasoning that the merger would create an entity with monopoly over the titanium products market.

Meanwhile, Tasnee’s financial performance for 2017 has been robust, with the Tadawul-listed company’s profits surging by more than 600 per cent from $26.93m in 2016 to $190.93m last year.

Al-Morished said Tasnee’s “tremendous” profit has been fuelled by two factors.

“The cost-cutting that we started in 2015 and continued through 2016 and 2017. The impact of these measures started to show in 2017 and will continue to produce results in 2018 and 2019. The other one is the improvement of prices of titanium dioxide, which was really bad in 2015-16.”