This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Albemarle Boosts Battery Business in $6.2B Deal

Stocks in this article: ALB ROC BAC HUN

NEW YORK (The Deal) -- Specialty chemicals firm Albemarle (ALB) on Tuesday said it plans to acquire Rockwood Holdings (ROC) in a $6.2 billion cash and stock deal aimed at supercharging its business supplying battery components.

Terms of the deal call for Baton Rouge, La.-based Albemarle to pay $85.53 per share for Rockwood, a 13% premium to Monday's close. The buyer will swap $50.65 in cash and 0.4803 shares for each share of Rockwood, with Rockwood holders controlling 30% of the combination post-deal.

Princeton, N.J.-based Rockwood is a supplier of specialty products including lithium, catalysts, bromine and surface treatment. The company is the world's largest supplier of lithium products, a key component of the batteries that go into laptops, smartphones and electric vehicles among other technologies.

Albemarle CEO Luke Kissam in a statement said that the purchase would create a lithium powerhouse while helping to power cash flow generation, allowing the buyer to pay down debt and support its dividend.

"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," Kissam said. "The resulting company will have broader customer reach, increased diversity across end markets, technologies and geographies and more consistent and predictable earnings growth."

Albemarle said it expects to extract $100 million in annual costs from the deal by 2016 and generate adjusted Ebitda of more than $1 billion by 2015. The company said it has secured committed financing from Bank of America Merrill Lynch (BAC) to fund the cash portion of the transaction, and said it expects to retain its investment grade ratings post-purchase.

The deal completes the gradual unwinding of Rockwood, a one-time portfolio company of Kohlberg Kravis Roberts that went public in 2005. The company in recent years had announced about $4 billion worth of divestitures, including selling its performance additives and titanium dioxide assets to Huntsman  (HUN) for $1.1 billion and its clay-based additives to British buyout firm Cinven for €1.49 billion ($1.98 billion).

Rockwood CEO Robert J. Zatta called the deal "a compelling transaction," saying "our complementary specialty chemicals portfolios are expected to generate significant growth through the continued penetration of lithium-based energy storage products, compelling secular trends driving global catalyst growth, attractive surface treatment prospects and new bromine applications."


Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,561.89 +205.02 1.18%
S&P 500 2,037.81 +24.92 1.24%
NASDAQ 4,709.2010 +64.8890 1.40%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs