MIDDLEBURY, Conn. (March 9)—Polymer and specialty chemicals producer Crompton Corp. is merging with Indianapolis-based Great Lakes Chemical Corp. in a stock-swap transaction valued at $1.8 billion, including about $250 million of Great Lakes debt and minority interest.
The new company, to be 51-percent owned by Crompton shareholders, will have combined pro forma 2004 revenues of more than $4.1 billion and a market capitalization of nearly $3.2 billion, the companies said. It will hold leading positions in specialty chemical niche businesses such as plastics additives, petroleum additives, flame retardants and pool chemicals along with strong positions in castable urethanes and crop protection chemicals.
The merger will have only a minor impact on rubber industry customers. Great Lakes will bring some antioxidant lines to Crompton's rubber chemicals businesses and flame retardants to the urethanes business.
Crompton anticipates the merger will create operating synergies that could result in annual cost savings of up to $100 million, according to Robert L. Wood, chairman, president and CEO of Crompton, who will serve in those capacities for the combined company.
To effect the merger, Great Lakes shareholders will receive 2.2232 shares of Crompton common stock for each share of Great Lakes common stock they hold, a rate that represents a 10.1-percent premium over Great Lakes' closing share price on March 8, 2005. The boards of directors of both companies have unanimously supported the agreement.