Another day, another chemical acquisition
Dow Chemical's announced acquisition of Rohm & Haas was followed quickly by an announced deal between two smaller, yet significant, US chemical companies. Ashland, the nation's largest chemical distributor and a major vendor of sealants, agreed to buy Hercules> the deal, including debt, is for $3.3 billion in cash and stock.
Hercules has sales in specialty chemicals used ion the paper business, along with water-based adhesives and products for the food and medical industries. It was established in 1912. It has some expertise in green technology and water treatment.
Ashland, founded in 1924, started life as an oil refining company. In 2006 (old timers might remember Ashland gas stations), it sold off its petroleum assets to its joint partner Marathon Oil. The company now provides chemicals and solvents to various businesses, including Automotive, Cleaning products, Coatings, Elastomers, Inks, Paints, Personal Care, and Plastics and Plastic Molding. It also sells various kinds of resins and adhesives. It owns the Valvoline brand name of consumer auto tune-up products.
According to a Bloomberg News story ("Ashland Buys Chemical Maker Hercules for $2.6 Billion", 8/11/08): "Global chemical makers are caught between record oil prices and weakening economies as retail sales, car-manufacturing and construction industries falter."
The same article reports that there have been over $41 billion in mergers and acquisition in the chemical industry so far in 2008, with the year barely half over.
Pressure is strong on many chemical companies. DuPont shares have been weak performers. There is call to break up the company; another case of the parts (especially the Electronics, Performance Materials, and Safety and Protection businesses,). It's also rumored that German chemcial giant BASF may be interested in swallowing the company (from Chemical Reactions: What Now for DuPont?', New York Times, Dealbook, 8/11/08).
6:11:36 PM 
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