Crompton announces sale of organosilicones business to GE and acquisition of GE's specialty chemicals business
Crompton Corporation has entered into a definitive agreement to sell its organosilicones business to the GE specialty materials division of General Electric Company and to acquire GE's specialty chemicals business.
At closing, Crompton will receive $645 million in cash and the GE Specialty Chemicals business, which has an agreed-upon value of $160 million. In addition, Crompton will receive quarterly "earn-out" payments for three years after closing based on the combined performance of GE's existing silicones business and the organosilicones business it is acquiring from Crompton. The earn-out, which is based on incremental contribution margin, will be a minimum of $105 million and a maximum of $250 million payable quarterly over a three-year period. For additional information regarding the terms of the transaction, please refer to the purchase agreement, which is being filed with the U.S. Securities and Exchange Commission on a Form 8-K.
The transaction is subject to regulatory approvals and other customary conditions and is expected to close in the third quarter. It will enable Crompton to reduce debt by over 40%, sharpen its strategic focus and provide flexibility for organic growth initiatives.
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