(Yicai) Oct. 17 -- LB Group, the world’s largest supplier of titanium dioxide, said it will acquire the British factory belonging to bankrupt Venator Materials UK, marking a major step in the Chinese company’s international expansion.

LB will pay USD69.90 million for the plant in Greatham, Hampshire and related intellectual property and USD14.2 million in transaction taxes and fees, the Henan province-based firm announced late yesterday. It will also keep on some staff.

Venator Materials UK and its parent company Venator are both under bankruptcy protection following default. As a result, the target assets are gradually being idled, according to LB.

After gaining by as much as 4 percent earlier today, LB’s shares [SHE: 002601] closed up 0.4 percent at CNY19.52 (USD2.74) each. The benchmark Shenzhen Component Index fell 2.8 percent.

After deducting depreciation and provisions, the net book value of the target assets, which are mortgaged, was about USD195 million as of Aug. 31, according to data provided by Venator Materials UK.

The acquisition will help LB enrich its titanium dioxide production processes and product categories and provide better services to global clients, the firm noted, adding that after the deal closes it will integrate the assets across production, supply, and sales to cut costs and improve capacity utilization.

The deal requires regulatory approval in China and the United Kingdom, LB said.

Venator is one of the four major titanium dioxide producers in Europe and the United States, and the UK factory is its only facility that uses the more efficient and environmentally friendly chloride process technology. The plant has an annual production capacity of 150,000 tons of titanium dioxide, according to LB.

LB has an annual production capacity of 1.5 million tons of titanium dioxide, its first-half earnings report showed in August.

In a separate statement yesterday, LB also announced it will invest USD50 million to set up a subsidiary in the UK and USD5 million to establish another in Malaysia to develop its overseas business and provide better products and services to clients abroad.

Editor: Futura Costaglione