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Momentive Performance Materials Holdings Inc., the parent company of Momentive Performance Materials Inc., and Hexion LLC, the parent company of Hexion Specialty Chemicals Inc., have announced an agreement under which their newly formed holding companies will mergeto create a global leader in specialty chemicals and materials. The boards of both holding companies have unanimously approved the merger, which is subject to customary conditions. The new company will operate under the Momentive Performance Materials name and closing is anticipated to occur October 1.
The capital structures of Momentive Performance Materials Holdings Inc. and Hexion LLC and their respective subsidiaries will remain separate and in place. Upon closing, with 117 production facilities, more than 10,000 associates, pro-forma annualized sales of approximately $7.5 billion and adjusted EBITDA of $1.24 billion, the new Momentive will be one of the world’s largest specialty chemicals and materials companies. The new company will have operations located to serve all major regions of the world with a range of specialty performance products for industrial and consumer markets.
Affiliates of investment firm Apollo Management L.P. own a controlling interest in both Hexion and Momentive. Based in Columbus, Ohio, Hexion serves industrial customers with a range of specialty chemicals. Momentive, based in Albany, NY, provides industrial customers and consumers with silicone- and quartz-based specialty materials.
“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 Apollo Management. “Once the transaction is completed, 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.”
Craig O. Morrison, chairman and CEO of Hexion, will become chairman and CEO of the combined company upon completion of the merger. Jonathan Rich, Ph.D., president and CEO of Momentive, will join the Board of Directors of the newly formed company and will continue his association with Apollo Management.
In addition, William H. Carter, Hexion executive vice president and CFO, will assume that role in the new company. Tony Colatrella, Momentive CFO, will assist in the transition. Steven Delarge, president of the Americas for Momentive, will become president of a new global Silicones & Quartz Division within the new Momentive organizational structure. The new company will be headquartered in Columbus, Ohio, and will maintain a significant presence in Albany, NY, where its silicones business will continue to be headquartered.
For more information, visit www.hexion.com or www.momentive.com.