Hexion and Momentive Performance Materials to merge

13 September 2010 14:19  [Source: ICIS news]

LONDON (ICIS)--Hexion, the parent company of Hexion Specialty Chemicals, and Momentive Performance Materials Holdings have agreed to merge in a bid to create a global leader in specialty chemicals and materials, the US-based producer said on Monday.

The new company, headquartered in Columbus, Ohio, would operate under the Momentive Performance Materials name, and closing was anticipated to occur on 1 October 2010.

The new Momentive would have 117 production facilities,  pro forma annualised sales of about $7.5bn (€5.9bn) and adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) of $1.2bn, making it one of the world’s largest specialty chemicals and materials companies, Hexion said.

“We believe the time is right to unify these two companies into a global leader in the specialty materials space,” said Josh Harris, managing partner and co-founder of US private equity firm Apollo Management, which launched Momentive Performance Materials in December 2006.

“...the combined company will be able to provide customers with a full range of specialty chemicals and materials and will have significant operations in virtually all major world markets. The transaction does not require any additional financing and will result in significant synergies that will enhance the financial profile of the new Momentive,” he added.

The capital structures of both Hexion and Momentive Performance Materials Holdings and their respective subsidiaries would remain separate and in place, the group said.

Craig Morrison, chairman and CEO of Hexion, would become chairman and CEO of the new Momentive upon completion of the merger, while Jonathan Rich, president and CEO of Momentive, would join the board of directors of the newly formed company, Hexion said.

“This transaction will forge an industry leader in specialty chemicals and materials, with significant operations in Asia, Europe and the Americas, a broad product and service profile and excellent opportunities for value creation,” Morrison said.

($1 = €0.79)

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By: Franco Capaldo
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