LyondellBasell Pens $2.25 Billion Deal to Acquire A. Schulman
February 15, 2018
LyondellBasell has entered into an agreement to acquire A. Schulman, Inc., a supplier of plastic compounds, composites, and powders, the two companies announced.
The $2.25 billion acquisition builds upon LyondellBasell’s existing advanced polymer solutions business. The merger will double the size of LyondellBasell’s existing compounding business, the company reports.
“The acquisition of A. Schulman is a natural extension of our current platform,” says Bob Patel, LyondellBasell’s chief executive officer. “This combination will allow us to provide our customers with a wider range of innovative solutions while adding the ability to serve high-growth end markets beyond the automotive sector, such as packaging and consumer products, electronics, and appliances. By leveraging our proven approach to operational, commercial, and business excellence, the combined business will create significant value for our shareholders and customers.”
Under the terms of the transaction, LyondellBasell will purchase 100 percent of A. Schulman’s common stock at $42 per share in cash and one contingent value right per share and assume outstanding debt and certain other obligations. LyondellBasell will use cash-on-hand to finance the acquisition and expects to achieve $150 million in run-rate cost synergies within two years. The two businesses together had revenues of $4.6 billion and adjusted EBITDA of $446 million over the past year.
“This transaction, which provides our shareholders with a compelling, immediate cash premium, represents the culmination of a robust assessment of strategic alternatives undertaken by our board of directors,” says Joseph M. Gingo, chairman, president, and chief executive officer of A. Schulman. “We are delighted to join forces with LyondellBasell, an industry leader we have admired for many years. LyondellBasell not only shares our commitment to meeting customers’ demanding requirements, but with its scale and resources, the combined business will be better-positioned to address a broader range of customer needs by integrating across applications and offering customers a wider range of solutions in attractive and growing markets. WE also expect this combination to create significant opportunities for A. Schulman employees, whose professionalism and expertise will be integral to advancing LyondellBasell’s vision, values, and commitment to making positive global impact.”