Chemicals maker Albemarle (ALB) has closed its $6.2 billion acquisition of Rockwood Holdings, Inc. The deal was announced in Jul 2014 and was cleared by shareholders of both companies at their respective special meetings in Nov 2014.
In sync with the deal terms, each outstanding Rockwood share has been converted into the rights to get $50.65 in cash and 0.4803 of a newly issued share of Albemarle stock.
Following the competition of the transaction, Rockwood has become a fully-owned subsidiary of Albemarle. Albemarle's CEO Luke Kissam will be the President and CEO of the combined entity which will operate under the “Albemarle” banner.
BofA Merrill Lynch – a unit of Bank of America (BAC) – served as financial advisor to Albemarle while Lazard (LAZ) and Citigroup (C) acted as financial advisors to Rockwood on the deal.
Albemarle’s shares gained as much as around 2.5% in the trading session on Monday.
The acquisition brings together two leading specialty chemicals makers with strong market positions and complimentary product portfolios. The merged entity will have greater customer reach, enhanced diversity across end markets, technologies and geographies.
The merger accentuates both companies’ efforts to shore up growth by creating a premier specialty chemicals company with leading market position in an array of high-margin businesses including lithium, surface treatment and refinery catalysts.
The combined company will be well positioned to boost earnings by expanding the reach of lithium-based energy storage products including batteries for the automotive industry, leveraging attractive trends in refinery catalysts including rising demand for transportation fuels, expanding in the bromine markets through new applications and capitalizing on its leading position in surface treatment products.
Albemarle expects the acquisition to be accretive to its cash earnings per share in the first year and adjusted earnings per share in the second year. Moreover, it expects around $100 million in cost synergies by 2016.
Albemarle currently holds a Zacks Rank #3 (Hold).
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