Chemical maker Huntsman Corp said on Monday that it would bid $415 million for some assets of bankrupt rival Tronox Inc to expand its pigments business.

Huntsman has signed a stalking horse agreement, making its offer the first at a bankruptcy auction and creating a base bid price for the assets.

Tronox filed for Chapter 11 protection in January.

Huntsman hopes to buy titanium dioxide facilities in the Netherlands and the United States, a 50 percent joint venture interest in a titanium dioxide facility in Australia, and electrolytic production facilities.

Titanium dioxide is often used as a pigment in products such as tattoos, food dyes and sunscreen.

Electrolytic materials can be used in batteries, semiconductors and pharmaceuticals, as well as to ignite automotive airbags.

Huntsman said it would finance about 50 percent of the purchase price with debt and the other half with cash.

A buyout would immediately add to operating earnings and cash flow, the company said.

By combining our existing pigments division with these assets, we also can realize substantial efficiencies that will benefit the customers, vendors, employees and other stakeholders of the combined business, Huntsman Chief Executive Officer Peter Huntsman said in a statement.

Greenwich Consultants analyst Michael Judd said Huntsman appeared to be buying low with this bid.

Yet Judd said he worried that if the economy hasn't fully bottomed, a deal could further strain Huntsman's already debt-laden balance sheet.

Also, he said, buying chemical assets in any market other than China, which is a large growth area for the entire industry, does not appear to be the best move.

Tronox filed for bankruptcy protection to contend with environmental remediation and litigation costs the Oklahoma City-based company inherited when it was spun off from Kerr-McGee Corp in 2006.

Tronox and other chemical makers have suffered from a decline in demand from the automotive and construction industries during the past two years.

Woodlands, Texas-based Huntsman had tried to sell itself to Hexion Specialty Chemicals last year, a deal that ultimately collapsed due to the weak chemical market.

Going on the offensive, Huntsman then sued Hexion and two banks that were set to fund the deal -- Credit Suisse and Deutsche Bank -- and in the end walked away with nearly $3 billion from the three companies.

Shares of Huntsman were down 5 percent at $7.93 in morning New York Stock Exchange trading. (Reporting by Ernest Scheyder in New York and Ajay Kamalakaran in Bangalore; editing by Mike Nesbit and Lisa Von Ahn)