Albemarle and Rockwood merger in a $6.2 bn deal

Albemarle Corporation and Rockwood Holdings Inc have entered into a definitive agreement under which Albemarle will acquire all outstanding shares of Rockwood in a cash and stock transaction valued at approximately $6.2 billion. This combination reflects both companies’ commitment to drive sustainable growth, creating one of the world’s premier specialty chemicals companies, with market-leading positions across four high-margin businesses: lithium, catalysts, bromine and surface treatment.
 
Upon closing of the transaction, Albemarle shareholders will own approximately 70% of the combined company and Rockwood shareholders will own approximately 30%.
 
The boards of directors of both companies have approved the transaction. The transaction is subject to shareholder and regulatory approvals and other customary closing conditions and is expected to close in the first quarter of 2015.
 
"The combination of these two companies creates a premier specialty chemicals company with a unique world-class team of experts and an enhanced focus on innovating customised, performance-based solutions to meet the ever-increasing demands of our customers,” said Luke Kissam, President and CEO, Albemarle.
 
He added, “The resulting company will have broader customer reach, increased diversity across end markets, technologies and geographies and more consistent and predictable earnings growth. All four businesses have high margins, strong competitive positions, and attractive long-term growth. The strong cash flows generated by these businesses will enable us to reduce leverage rapidly, support our ongoing dividend payments, and continue investing in the businesses to fuel growth and deliver increased value to our shareholders.”
 
Robert J Zatta, Chief Executive Officer, Rockwood, said, “Our complementary specialty chemicals portfolios are expected to generate significant growth through the continued penetration of lithium-based energy storage products, compelling secular trends driving global catalyst growth, attractive surface treatment prospects and new bromine applications.”
 
The transaction brings together two of the world's leading specialty chemicals producers with strong market positions. All four businesses of the combined company have low-cost raw material access, highly specialised production assets and proven track records of delivering market-leading technology, product innovation, and customer service.
 
The combine power
On a combined basis, the mergered entity is expected to drive growth through:

• Continuing to penetrate lithium-based energy storage products, including e-mobility batteries and batteries for the automotive industry;
• Capitalising on attractive global trends in refinery catalysts, including the increasing demand for transportation fuels particularly in developing regions, as well as the demand for solutions to convert a range of feedstocks into high-value finished products;     
• Expanding within existing bromine markets driven by the proliferation of digital technology, offshore deep water drilling and mercury control emission reduction, along with growth driven by new bromine applications;
• Leveraging the company's position as a market-leading provider of surface treatment products and services to meet increasing customer demand for products with rigorous quality and performance standards and specifications.