Ecolab acquire Nalco $8 billion

Ecolab to acquire Nalco for $8 billion

5:45 PM, 27th July 2011
Ecolab to acquire Nalco for $8 billion
Douglas M Baker, Jr, Chairman, President and CEO, Ecolab.

· The merger will help in capitalizing on mega trends and participation in emerging markets.

· Ecolab to pay approximately $5.4 billion, valuing Nalco stock at $38.80 per share.

· Increased scale and participation in emerging markets.

· Positioned to capitalize on mega trends: Growth in food demand and food safety challenges, energy demands, water scarcity, aging population's needs for healthcare, shifting economic trends.

ST PAUL, US: Ecolab Inc and Nalco Holding Company have agreed for Nalco to merge with a subsidiary of Ecolab in a transaction valued at approximately $8 billion, including assumed Nalco net debt. The transaction is expected to close in the fourth quarter, subject to customary closing conditions and approvals.

Based in Naperville, Illinois, Nalco is the world’s leading water treatment and process improvement company. Nalco sales were $4 billion in 2010. In aggregate, Ecolab will issue approximately 68.9 million shares of Ecolab stock and pay approximately $1.6 billion in cash to Nalco shareholders. This represents a fully-diluted offer value for Nalco’s equity of $5.4 billion and, inclusive of $2.7 billion in Nalco net debt, a total transaction value of $8.1 billion.

Advantages of the merger:

· Nalco is well-positioned to benefit from water, energy and emerging market trends, all providing strong long-term potential.

· Ecolab is well-positioned in food safety and healthcare, benefiting from an increasing global focus on cleaning and sanitizing.

· Strengthened Emerging Markets Exposure: The combined company will have approximately $1.5 billion revenue position in high growth emerging markets.

· Water treatment is a core need for Ecolab’s customers, and presents an essential circle the customer opportunity

· Leadership continuity: Nalco operating management team will join Ecolab

“This merger is a strong and vital step in broadening our business platform and enhancing our global growth opportunities. Through our participation in the water sector, we identified water management as a key future growth segment for us given its growth characteristics and importance to our customers. Nalco’s water and oil and gas services end markets represent excellent long term growth potential. Further, its geographic exposure to high-growth emerging markets offers future growth potential,” said Douglas M Baker, Jr, Chairman, President and CEO, Ecolab.

“This is a compelling strategic transaction that delivers an immediate premium to our shareholders and the opportunity to participate in the significant upside potential of the combined organization. We share similar cultures and business modelsm,” said Erik Fyrwald, Chairman, President and CEO, Nalco.

(C) WOC News




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