Albemarle and Rockwood Holdings Ink Agreement

Albemarle Corp of Baton Rouge, LA and Rockwood Holdings Inc of Princeton, NJ have entered into a definitive agreement under which Albemarle will acquire all outstanding shares of Rockwood in a cash and stock transaction valued at approximately US$6.2 billion. The boards of directors of both companies have approved the transaction that, subject to regulatory approvals, is expected to close in the first quarter of 2015. Albemarle shareholders will own about 70% of the combined company and Rockwood shareholders will own approximately 30%. The combined company will retain the Albemarle name and have annual sales of about US$4 billion. Albemarle had 2013 sales of US$2.6 billion and Rockwood sales of US$1.38 billion. The new company will have four major businesses: lithium, catalysts, bromine, and surface treatment. Luke Kissam, Albemarle’s CEO, said, “The combination of these two companies creates a premier specialty chemicals company with a unique world-class team of experts and an enhanced focus on innovating customized, performance-based solutions to meet the ever-increasing demands of our customers. The resulting company will have broader customer reach, increased diversity across end markets, technologies and geographies and more consistent and predictable earnings growth. All four businesses have high margins, strong competitive positions, and attractive long-term growth.” In the year prior to this transaction, Rockwood divested seven non-core businesses for approximately US$3.9 billion and paid US$475 million in cash for a 49% interest in Talison Lithium. Rockwood’s two key businesses are lithium and surface treatment. Rockwood is well established as a lithium producer entering the market in 2004 with the purchase of Chemetall from Dynamit Nobel of Germany. Rockwood currently operates lithium facilities in Salar de Atacama and La Negra in Chile, Silver Peak, NV, and Kings Mountain, NC. Talison gives Rockwood access to hard rock lithium operations in Western Australia and a lithium brine project in Argentina. Albemarle announced its intention of developing its brine reserves in Arkansas into a world-class lithium business in 2012. A spokesperson for the company tells ISN that it is too early to say how the addition of Rockwood will impact the development of its project, but the company will welcome their expertise. Albemarle is a world leader in the production of bromine from brine, including an existing facility in Magnolia, AR.

Volume 28 issue 14

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