A Chinese titanium dioxide supplier has acquired the UK-based titanium dioxide assets of the European giant Venator for approximately 69.9 million (equivalent to about 498 million RMB) in a typical bottom-fishing operation. The acquisition target comprises assets related to the titanium dioxide business held by Venator UK, including land, buildings, equipment, intellectual property, and inventory. According to the announcement, the Chinese buyer is also expected to bear relevant taxes and fees of approximately14.19 million (about 101 million RMB), with the acquisition funds sourced from its own or self-raised funds .

Venator is one of the top four titanium dioxide producers in Europe and America, possessing both sulfate and chloride production processes . The Venator UK facility is Venator's only plant producing titanium dioxide via the chloride process, with an designed annual capacity of 150,000 tonnes . According to Venator UK's management accounts, as of August 31 this year, the target assets had an original book value of approximately 534 million, with accumulated depreciation and provisions of about339 million, resulting in a net book value of approximately $195 million . This means the acquisition price represents only 35.8% of the net book value .

The core reason for the discounted purchase is that Venator UK is in a state of being unable or likely to become unable to pay its debts. It submitted a Notice of Intention to Appoint Administrators to the court on October 10 this year, and the target assets are gradually entering a shutdown state .

Despite the seemingly low cost, this transaction carries multiple potential risks . As of the signing date of the agreement, all the target assets intended for acquisition were under mortgage . If the creditors fail to lift the mortgage by the closing date, the transaction cannot be completed smoothly . Furthermore, the deal still needs to pass anti-monopoly and foreign investment reviews, creating uncertainties about whether and when the transaction will be successfully completed .

Under the special circumstances of the seller's bankruptcy, the Chinese buyer cannot obtain effective representations and warranties from the seller. Unless the seller intentionally breaches the contract, its liability for compensation is capped at just $1 .

Additionally, the Chinese side faces challenges related to restarting and integrating the assets . The factory is currently shut down, and it remains uncertain whether the production line can be successfully restarted and achieve stable operation . Coupled with risks arising from cross-border operations, such as cultural and management differences, as well as changes in industry policies, the future operational benefits of this acquisition remain highly uncertain .

ighly uncertain .