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Huntsman Paying $1.1 Billion in Cash for Rockwood Businesses

By  +Follow September 17, 2013 9:04AM
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Huntsman Corp. (HUN) , a global manufacturer and marketer of chemicals, said Tuesday that it has agreed to by the performance additives and titanium dioxide (TiO2) businesses of Rockwood Holdings Inc. (ROC) , the world’s largest producer of lithium products, for $1.1 billion in cash.  Huntsman will also assume the unfunded pension liabilities of the businesses, estimated at $225 million.

The businesses being sold include Titanium Dioxide Pigments, Color Pigments & Services, Timber Treatment Chemicals, Rubber/Thermoplastics Compounding, and Water Chemistry.  Applications for products made from the businesses are used in coatings, construction, concrete, plastics, papers, inks, food, cosmetics, pharmaceuticals, fibers and films, amongst other things.  Titanium dioxide is a key component in paint and industrial coatings.

Rockwood said that the businesses had combined net sales of $1.45 billion in 2012 and $1.54 billion in last twelve months ended June 30, 2013.

The deal, which is expected to close in the first half of 2014, is expected to be immediately accretive to Huntsman’s earnings and add 60 cents per share on an annual basis.  The profits estimate is assuming 2014 results and $130 million in annual cost savings that should be fully achieved by the end of 2015.

The acquisition will make Huntsman the second largest producer of titanium dioxide and inorganic color pigments in the world.  Huntsman says it plans to spin-out the combined pigments business through an initial public offering within two years.

"In addition to creating a $3 billion Pigments leader, we believe this public offering will allow greater investor focus and appreciation for our differentiated businesses,” said Peter Huntsman, president and chief executive of Huntsman Corp., in a statement today.

The sale is the latest in a string of non-core divestments at Rockwood as it focuses on its metal business.  In June, Rockwood agreed to sell its German ceramics unit CeramTec to European private equity firm Cinven for about $2 billion.  In July, the company sold its clay-based additives business to Germany-based specialty chemical maker Altana AG for $635 million. 

"With the sale of these businesses, we have successfully completed, ahead of schedule, all of our key objectives for 2013," said Seifi Ghasemi, chairman and CEO at Rockwood. 

Rockwood unveiled a plan in January with four main goals to grow shareholder value, including:  repurchasing $400 million in common stock (completed on Sept 5); a target dividend yield between 2.8 percent and 3.2 percent (quarterly dividend raised 28% to 45 cents per share); repaying up to $600 million in debt ($1.43 billion repaid); and launching a strategic process for non-core businesses (sold units for an enterprise value of approximately $3.9 billion).

Shares of Rockwood rose on Monday, when Reuters reported that three people close to the matter said a deal between Rockwood and Huntsman for the assets was nearly complete.  Shares of ROC have gained about 35 percent in 2013 and are essentially flat in pre-market trading on Tuesday.  Huntsman shares were up about 20 percent so far in 2013 through Monday’s close, but have skipped ahead 7 percent in limited pre-market activity to $20.50.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for HUN
ClickMediaUK
21 Oct 14 21:59:06
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21 Oct 14 21:03:08
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21 Oct 14 20:00:08
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21 Oct 14 16:30:15
RT @scalpthatstock: Handful of nice looking uptrends and breakouts to slap on your radar http://t.co/0Mow7Xfecn $CSCO $TSM $CCI $HUN $TXN …
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21 Oct 14 16:18:59
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Daily Contracts
21 Oct 14 13:59:00
Real-Time feed of company contracts, original agreements and executive updates from Huntsman Corporation $HUN http://t.co/zcrwRN6reO
Ari Fuchs
21 Oct 14 09:16:10
#Princeton #NJ based Rockwood completes $1.3B sale of 5 business units to Huntsman Corp | http://t.co/rHk38GlTul via @NJBIZ #NJMnA $ROC $HUN
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21 Oct 14 00:38:46
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20 Oct 14 12:57:15
Potential Huntsman $HUN Trade Has 7.51% Downside Protection ( http://t.co/vPzMCFohw0 )
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20 Oct 14 12:14:42
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20 Oct 14 11:33:23
$HUN look at all that resistance at 23.16
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20 Oct 14 10:01:58
$HUN Trade-Ideas: Huntsman (HUN) Is Today's Post-Market Leader Stock http://t.co/a6Pi4SE6Fq
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20 Oct 14 08:02:45
$HUN Huntsman Corporation (HUN) Ex-Dividend Date Scheduled for September 18 ... http://t.co/x4JchvqNJM
4-traders.com
20 Oct 14 06:05:02
Huntsman : Textile Effects Wins Top Honors At 2014 ICIS Innovation Awards http://t.co/5Se9v2AFGV $HUN
lil Kirko
20 Oct 14 04:31:49
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$haun
20 Oct 14 03:50:19
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20 Oct 14 02:25:33
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19 Oct 14 09:34:03
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18 Oct 14 13:44:46
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18 Oct 14 11:14:13
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18 Oct 14 09:47:49
Many stocks are undergoing dramatic changes in their WEEKLY price structure. $HUN an example. $STUDY http://t.co/HTBJsHxcrt
Media Sentiment
17 Oct 14 11:15:19
$HUN received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 385
Market Int Center
17 Oct 14 11:12:06
Huntsman $HUN Showing Bearish Technicals ( http://t.co/VTcqdHPf5a )
US_proptrader
17 Oct 14 07:59:39
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17 Oct 14 00:55:27
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InsiderTradingWire
16 Oct 14 19:45:14
$HUN | Huntsman Corporat is down 15% since we reported $1,531,360 of insider selling on 08/07/2014. Did you ... - http://t.co/Is3QEBJODR
Stockaholics
16 Oct 14 16:51:03
ABPI Gained 1,587.50% In 3 days! Big News: http://t.co/7gQJ2ZCjuq $DO $HUN $TXT
4-traders.com
16 Oct 14 13:10:06
HUNTSMAN : Change in Directors or Principal Officers (form 8-K) http://t.co/wKkGCOTdzF $HUN
NASDAQ
16 Oct 14 13:08:16
$HUN - Current Report Filing (8-k) http://t.co/pfr31YHn63
$Stocknewsalerts
16 Oct 14 13:07:57
$HUN ALERT: New Huntsman Corporation SEC Filing From our Stock News Alerts App
Instrumental Data
16 Oct 14 13:05:31
HUNTSMAN CORP $HUN 8-K now available
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16 Oct 14 12:58:03
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16 Oct 14 11:43:56
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Media Sentiment
16 Oct 14 11:15:09
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16 Oct 14 11:12:47
Huntsman $HUN Showing Bearish Technicals With Support At $19.91 ( http://t.co/wvfRIiNoKV )
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16 Oct 14 07:40:51
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Large Void Bot
16 Oct 14 06:45:15
Daily Reversals: $WPX, $HUN, $SYRG, $JASO, $WPRT, $SGY, $MTZ, $MSCC, $SMTC
HuntsmanTextile
16 Oct 14 06:25:23
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Huntsman
16 Oct 14 06:19:31
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EyeBeThere
16 Oct 14 02:00:28
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Stockaholics
15 Oct 14 23:49:03
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Jerremy Newsome
15 Oct 14 21:39:38
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Colin Macleod
15 Oct 14 18:51:52
Day Trading Chart Setups for October 16th http://t.co/YLQjDDPD2j $XONE $SHLD $VSLR $HUN $QEP $NFLX
				
				
By  +Follow September 17, 2013 9:04AM
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