WILTON, Conn.--(BUSINESS WIRE)--April 24, 2003--
Organosilicones platform will join GE Silicones to offer an unparalleled line of application expertise and technology to customers.
GE Specialty Materials, a unit of General Electric Company (NYSE:GE), today announced that it has entered into an agreement to acquire OSi Specialties, an organosilicones business, from Crompton Corporation (NYSE:CK).
OSi will become part of GE Silicones, a division with 2002 revenues of $1.2 billion within GE Specialty Materials. The transaction, which is expected to close in the third quarter of 2003, will allow GE Silicones to serve large, new market applications with OSi Specialties' strong portfolio of complementary product technology, adding more than $450 million in annual sales.
Upon closing, Crompton will receive $645 million in cash and GE's Specialty Chemicals business. GE Specialty Chemicals produces additives for a broad range of applications for the plastics industry and generated sales of $165 million in 2002. Crompton will also receive quarterly "earn-out" payments for three years after closing based on the performance of the new combined GE Silicones business. The earn-out, which is based on incremental contribution margin, is expected to range from $105 million to a maximum of $250 million. The transaction is subject to regulatory approval and other customary conditions.
"This is a significant move for our business," said William A. Woodburn, president and CEO of GE Specialty Materials. "We are building a stronger GE Silicones business that will deliver better technologies and application development services to our global customers. We are focusing our investment in platforms where we can win and grow for the long term. Selling our smaller Specialty Chemicals unit to the Crompton team will enable it to be part of a larger additives organization where it can win over the long term."
OSi Specialties pioneered silane and specialty silicone technology, and is a leading global supplier of organofunctional silanes - products that GE does not currently offer. The advanced silane technology acts as a coupling agent in applications for coatings, adhesives, sealants, thermoplastics and fiberglass. OSi's urethane additives improve the performance and safety of automotive seating, appliances, shoes, construction materials and furnishings. Their specialty silicones are used across a broad expanse of applications.
GE Silicones vice president and general manager, Wayne Hewett said, "We are thrilled about the complementary products, technology and application expertise we can offer. OSi Specialties greatly enhances GE Silicones capabilities and we look forward to serving our bigger, broader combined customer base."
Commenting on Crompton's acquisition of GE Specialty Chemicals, Crompton Chairman, President and CEO Vincent A. Calarco said, "This transaction fits our strategy of focusing on specialty polymers and polymer additives and positions us as one of the top marketers of plastics additives in the world. Our broader product offerings will enable us to satisfy a significant portion of our customers' requirements."
GE Specialty Materials (GESM) is an advanced materials technology and service company offering a wide range of products including chemical water treatment programs, process additives, fused quartz, silicones and industrial diamonds. GE Silicones and GE Betz are two billion-dollar revenue platforms that, with GE Quartz and GE Superabrasives, define the GE Specialty Materials portfolio. GESM's more than 10,000 global employees use technological innovation and Six Sigma to serve customers in segments as diverse as cosmetics, semi-conductors, oil drilling, construction and telecommunications. Visit GE Specialty Materials online at gespecialtymaterials.com.
Crompton Corporation is a $2.5 billion producer and marketer of specialty chemicals and polymer products providing the solutions, service and value its customers need to succeed. Additional information is available at www.cromptoncorp.com.
This news release includes forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, reflecting management's current analysis and expectations, based on reasonable assumptions. Results could differ materially depending on such factors as business climate, economic and competitive uncertainties, failure to complete transactions, adverse legal and regulatory developments, and adverse changes in economic and political climates around the world. As appropriate, additional factors are contained in reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. This paragraph is included to provide safe harbor for forward-looking statements, which are not required to be publicly revised as circumstances change.
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CONTACT:
GE
Milissa Rocker, GE Specialty Materials and GE Silicones
518/233-3893
Pager: 518/341-3390
KEYWORD: CONNECTICUT
INDUSTRY KEYWORD: CHEMICALS/PLASTICS UTILITIES MERGERS/ACQ
SOURCE: GE Specialty Materials