Albemarle Corporation announced on Tuesday that it plans to acquire competitor Rockwood Holdings for $6.2 billion in a cash and stock deal. The move will combine two of the world’s largest specialty chemical companies.
Shearman & Sterling, Troutman Sanders and Kelley Drye & Warren advised Albemarle, while Simpson Thacher & Bartlett advised Rockwood Holdings. Bank of America and Merrill Lynch acted as financial advisers to Albemarle, and Lazard and Citigroup advised Rockwood.
Albemarle, based in Baton Rouge, La., and Rockwood Holdings, based in Princeton, N.J., expect the merger to allow them to focus on four highly profitable areas: lithium, catalysts, bromine and surface treatment, according to a release. The deal will exchange each share of outstanding Rockwood stock for $50.65 in cash and 0.4803 of a share of Albemarle common stock.
“The resulting company will have broader customer reach, increased diversity across end markets, technologies and geographies and more consistent and predictable earnings growth,” Albemarle’s president and CEO Luke Kissam said in a statement.
Not all are happy with the plan. Shareholder litigation firm Ryan & Maniskas announced today that it intends to investigate claims against the board of directors of Rockwood Holdings of alleged violations of fiduciary duty in the sale. Rockwood officials, however, said the merger was very good for shareholders.
“This compelling transaction offers Rockwood shareholders an immediate premium and significant participation in the tremendous growth potential of the combined organization,” said Rockwood’s CEO Robert J. Zatta in a statement. “Our complementary specialty chemicals portfolios are expected to generate significant growth.”
The boards of directors of both companies have approved the deal, though it is still subject to shareholder and regulatory approvals. If the deal goes through, Albemarle shareholders will own about 70 percent of the company and Rockwood Shareholders will own about 30 percent.
Partners John Marzulli and Eliza Swann led the Shearman & Sterling team. Partners John Owen Gwathmey and David Carter, as well as associate Doug Boyle, led Troutman Sanders. Partners M. Ridgway Barker, Clyde Tinnen, Patricia M. Lee, Pamela D. Kaplan and Victoria H. Zerjav led Kelly Drye & Warren.
Rockwood’s representation from Simpson Thacher & Bartlett was led by partners Brian Stadler and Roxane Reardon.