WATERFORD, N.Y.—The U.S. government shutdown is delaying the deal for three South Korean firms—KCC Corp., Wonik QnC Corp. and SJL Partners L.L.C.—to buy MPM Holdings Inc., the parent company of global silicones supplier Momentive Performance Materials Inc.
In a filing with the U.S. Securities and Exchange Commission, Momentive said that it has agreed to extend the deadline to June 13 in order to obtain merger clearance from the U.S. authorities.
If the Committee on Foreign Investment in the U.S.—part of the U.S. Treasury—does not approve the deal by then, either side could walk away. When Momentive announced the plan it expected the deal to close in the first half of 2019.
The South Korean companies had agreed to acquire Momentive for about $3.1 billion, including assuming all of Momentive's net debt, pension and OPEB liabilities. Momentive reported total liabilities of $2.18 billion through six months of 2018.
Under terms of the agreement, the investor group will assume Momentive's net debt obligations subject to minimum closing cash requirements of $250 million. Momentive stockholders will receive $32.50 for each share of common stock they own subject to minimum closing cash requirements. Momentive said the terms were unanimously approved by the Momentive, KCC and Wonik boards of directors; the investment committee of SJL; and by the requisite vote of Momentive's stockholders.
KCC is a Korean chemical engineering, paint and building materials company. Wonik QnC makes and sells quartz and ceramics for silicon wafers. SJL Partners is a private equity investment manager.