Ashland Completes Hercules Takeover

Nov. 16, 2008
Specialty chemicals group seeks savings of $120 million/year after $3.3-billion deal

Ashland Inc. reports it has finalized its $3.3-billion acquisition of Hercules Inc., creating a wider global specialty chemicals group organized as five business units, focusing on three global market segments: paper and water technologies; specialty resins; and specialty additives and functional ingredients. Ashland said its “logistics efficiencies and well-developed marketing capabilities in consumer markets complement its core businesses and enhance its ability to deliver valued products and services.”

The Ashland Casting Solutions organization, which supplies the metalcasting industry with binder chemicals and release agents, among other products and technologies, is being consolidated into a new venture with the foundry-related businesses of Sud-Chemie AG, and Ashland-Sdchemie-Kernfest GmbH (ASK), a longtime joint venture of Ashland and Sud-Chemie.

The takeover of Hercules, which manufactures specialty chemicals for home, office, and industrial markets, was announced in July. James J. O’Brien, Ashland chairman and CEO, stated: “Together, we now begin working to build an exciting new future, confident that our people, technologies, products, and services will drive our growth for years to come.”

Ashland foresees annual operating-cost savings of approximately $120 million in the combination of the two organizations, by FY 2010.

The five business units will be Ashland Hercules Water Technologies, a specialty paper and water chemicals business formed from the related operations of Hercules and Ashland; Ashland Performance Materials, the specialty resins business serving construction, infrastructure, energy and transportation segments; Ashland Aqualon Functional Ingredients, supplying specialty additives and functional ingredients for personal care, pharmaceuticals, food, construction, transportation and other industries; Ashland Consumer Markets, featuring Valvoline lubricants and other automotive products; and Ashland Distribution, which distributes chemicals, plastics, composite materials, and environmental services.