ERJ staff report (R&PN)
Columbus, Ohio -- Hexion Specialty Chemicals Inc. is merging with Momentive Performance Materials Inc. to create a specialty chemicals company with annual sales of $7.5 billion.
Both Columbus, Ohio-based Hexion and Albany, New York-based Momentive are majority-owned by private equity firm Apollo Management L.P. of New York. Officials with the firms said that no additional financing is required for the merger, which is set to close Oct. 1.
The combined company will keep the Momentive name, but will be based in Columbus and led by Craig Morrison, Hexion chairman and CEO, who will hold those titles with the new company. Jonathan Rich, president and CEO of Momentive, will join the board of directors of the new company and continue his association with Apollo Management.
The new firm will have more than 10 000 employees and operate 117 manufacturing sites worldwide.
Momentive was formed in 2006 when Apollo bought the GE Advanced Materials unit-including silicone and quartz production-from General Electric Co.
Hexion-formed from the 2005 merger of four specialty chemicals firms-had sales of $4 billion in 2009. In the first half of 2010, the firm's sales grew 33 percent to almost $2.5 billion when compared to the first half of 2009, but first-half profit fell 26 percent to $45 million in the same comparison, the company reported.
Epoxy and phenolic resins was the largest of Hexion's three segments in the first half of 2010, generating 47 percent of overall sales. That unit's pretax profits also grew 63 percent to $178 million in the first half.
From Rubber & Plastics News (A Crain publication)