Here's Why Titanium Stocks Were Crushed Today
Titanium dioxide producers received a rare bit of bad news today -- with a little bit of drama sprinkled in.
Tronox (NYSE: TROX) appeared set to proceed with its proposed acquisition of the titanium dioxide business of Cristal, a privately held global mining and chemical company based in Saudi Arabia, as recently as the first of December. That's when the comment period expired under the Hart-Scott-Rodino Act, a major antitrust law that grants the U.S. Federal Trade Commission and U.S. Department of Justice powers to intervene in large business mergers.
But investors' celebration may have been a little premature. Today the FTC decided to block the proposed merger citing concerns about competitiveness in the global titanium dioxide market. Tronox has vowed to appeal the decision, which it thinks is based on erroneous information about the market's structure, but the stock dropped as much as 27.1% today. That's because Wall Street thinks the proposed Cristal acquisition is critical to the company's valuation and future growth.
Source: Fool.com
