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Tronox announced Monday it had agreed to acquire the mining sands operations in exchange for a 38.5 per cent shareholding in New Tronox, the newly formed Australian holding company. Norton Rose's Kevin Cron advised Exxaro on the deal.
Exxaro’s mineral sands operations comprise the Namakwa Sands and KZN Sands operations in South Africa, as well as its 50 per cent interest in the Tiwest Joint Venture in Australia that it has with Tronox. Bloomberg values the merger at around US$3.3 billion.
Australian firm Blake Dawson, which announced a merger this week with British firm Ashurst, is advising Tronox on the transaction. M&A partners Marie McDonald and Bruce Dyer, energy and project finance partner Rupert Lewi, and tax partner Geoffrey Mann are Australian counsel on the deal with Exxaro.
Freehills has advised Exxaro Resources on the US$1.5 billion sale of the mineral sands operations.
Under the deal, Exxaro will retain a direct 26 per cent interest in its South African mineral sands operations in order to comply with the requirements of South African Black Economic Empowerment legislation.
If the Department of Mineral Resources in South Africa determines that the 26 per cent ownership is no longer required, Exxaro may exchange this interest for additional shares in New Tronox, which would result in Exxaro holding approximately 41.7 per cent of New Tronox after such exchange.
Freehills partner Daniel Blue led the Exxaro Australian legal team supported by senior associates Paul Tempone and Nick Baker, as well as Toby Eggleston, director of Greenwoods & Freehills.
Blue said: “The client and adviser teams have worked incredibly hard to complete this transaction in what has been a very challenging timeframe. We have been associated with the Australian joint venture since it was formed over 20 years ago and are pleased to continue our involvement with our client’s activities.”