Crompton Closes OSi Transaction With GE

01-Aug-2003

Crompton Corporation announced that it has completed the sale of its organosilicones business to General Electric Company and its acquisition of the GE specialty chemicals business in a transaction valued at as much as $1.05 billion.

In the transaction, Crompton received $633 million in cash for its organosilicones business and acquired the GE Specialty Chemicals business, which has an agreed-upon value of $160 million. Crompton expects to receive an additional $12 million upon the transfer to GE of certain additional OSi assets located overseas. Under terms of the transaction, Crompton also will receive quarterly "earn-out" payments for three years, based on the combined performance of GE's existing silicones business and the organosilicones business sold to GE. The earn-out will total a minimum of $105 million and a maximum of $250 million, bringing the full value of the transaction to a minimum of $910 million and a maximum of $1.05 billion. Over the next few months, Crompton intends to pay down over $525 million in debt, a reduction of over 40%, and make a contribution of approximately $75 million to its pension plans.

The acquired GE Specialty Chemicals business is a major supplier of secondary antioxidants and impact modifiers, products that complement Crompton's existing plastics additives business, which services the vinyl and olefins and styrenics markets. "With this addition to our portfolio, we will have a significant position in each major segment of the value chain, from monomers to polymerization, to finishing, compounding and fabrication," Calarco said. "Combining our plastics additives expertise with our polymer processing capabilities through our Davis-Standard equipment business gives us a distinct competitive position in the polymer industry.

https://www.chemeurope.com/en/news/26704/crompton-closes-osi-transaction-with-ge.html