Home » Ashland Inc. Agrees to Buy Hercules in $3.3B Deal
Ashland Inc. Agrees to Buy Hercules in $3.3B Deal
July 11, 2008
Global chemical company Ashland Inc. has agreed to acquire Hercules Inc., Wilmington, DE, in a deal valued at $3.3 billion. The transaction, which would create a major, global specialty chemicals company, is expected to close by the end of 2008.
With sales in more than 100 countries, Ashland is a manufacturer of specialty chemicals, a distributor of chemicals and plastics, and a provider of automotive lubricants, car-care products and quick-lube services.
Hercules is a supplier in specialty additives and ingredients that modify the physical properties of water-based systems and is a supplier of specialty chemicals to the pulp and paper industry.
Upon the transaction's close, Ashland will have pro forma combined revenue for the 12 months ended March 31, 2008, of more than $10 billion, including $3.5 billion generated outside North America.
The acquisition of Hercules fulfills our objective to become a leading specialty chemicals company. It creates a defined core for Ashland composed of three specialty chemical businesses with strong market positions and promising global growth potential: specialty additives and ingredients, paper and water technologies, and specialty resins. In addition, we expect our financial profile to be enhanced significantly through reduced earnings volatility, improved profitability and stronger cash flow generation," said Ashland CEO James J. O'Brien.
O'Brien said Ashland would combine the paper and water businesses of each company to create one global paper and water technologies business with annual revenue of $2 billion. The move bolsters Ashland's position in water treatment markets.
The acquisition also gives Ashland expanded global opportunities for the specialty resins business in key building and construction markets, including infrastructure and wind energy.