Chemicals maker Albemarle (ALB) said that it is realigning its global business units following the recent closure of its takeover of Rockwood Holdings, Inc. The move will align the company's strategic assets and businesses to be market focused and enable it to more effectively leverage its resources on innovation and growth.
The new business structure, which will come into effect by the end of first-quarter 2015, will be comprised of three global business units – Chemetall Surface Treatment, Refining Solutions and Performance Chemicals.
The Chemetall Surface Treatment unit will supply specialty chemicals with a focus on processes for the surface treatment of metals and plastics. Refining Solutions, which will be comprised of heavy oil upgrading and clean fuels technologies businesses, will offer a broad range of catalyst solutions that apply to the entire refinery process. Performance Chemicals will integrate the lithium, aluminum alkyls and derivative catalysts businesses with Albemarle's current Performance Chemicals business unit.
Albemarle also noted that each business unit will have a dedicated team of sales, R&D, process engineering, manufacturing and sourcing, and business strategy personnel.
Albemarle also announced its senior leadership team which will report to the company’s President and CEO Luke Kissam. Joris Merckx will serve as president, Chemetall Surface Treatment, while Silvio Ghyoot will assume the role of president, Refining Solutions. Moreover, Michael Wilson will serve as president of the Performance Chemicals unit. The leadership team will become effective with the realignment of the business units.
Albemarle said that the new structure will help it attain its strategic objectives of growing faster, performing at even higher levels and speed up the recognition and achievement of synergies beyond the identified cost synergies. It will also help the company to leverage its long-term lithium strategy.
Albemarle completed its $6.2 billion acquisition of Rockwood on Jan 12, 2015. In line with the terms of the deal, which was announced in Jul 2014, 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.
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 is a Zacks Rank #3 (Hold) stock.
Other companies in the chemicals space worth considering include Innophos Holdings Inc (IPHS), Olin Corp. (OLN) and Air Products & Chemicals Inc. (APD). While both Innophos and Olin hold a Zacks Rank #1 (Strong Buy), Air Products retains a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment