Korea’s DL Chemicals Agrees to Buy Kraton
Specialty polymers and bio-based products manufacturer Kraton has agreed to be acquired by Korean petrochemicals and engineering group DL Chemical, part of DL Holdings, formerly known as Daelim Industrial. The all-cash transaction foresees DL Chemical paying $2.5 billion to take full control of the company based at Houston, Texas, in the US.
Under the terms of the deal, which is being called a merger, Kraton shareholders will receive $46.50 in cash for each share of common stock they own. DL Chemical, which acquired Kraton's Cariflex isoprene rubber latex business unit for $530 million last year, said it has “fully committed” financing.
The merger agreement expected to be finalized by the end of the first half of 2022 has been unanimously approved by the company’s board of directors, which has recommended that shareholders vote in favor. Closing is subject to certain customary closing conditions, including the receipt of shareholder and regulatory approvals.
Kevin M. Fogarty, Kraton's president and CEO, said the decision to sell the company reflects the board’s “extensive review of a wide-range of strategic alternatives focused on maximizing value for the benefit of our stockholders.”
Fogarty said the board believes the sale is in the best interest of the company’s investors as it represents an attractive premium of approximately 50% over Kraton's unaffected market valuation as of early July. “Moreover,” he said, “we believe DL Chemical has the industry presence and resources to continue to support the growth of Kraton's business on a global scale."
In particular, “the scale and strength of the combined company will expand Kraton's global reach while creating a robust platform to further support investment in the existing innovation pipeline and provide for further expansion of sustainable offerings," board chairman Dan F. Smith, commented.
Sang Woo Kim, vice chairman and CEO of DL Chemical, said his company has been “highly interested” in Kraton's specialty polymer and bio-based chemical business, and this combination will allow it to provide customers with a wider range of innovative products, while adding the ability to serve a diverse range of end markets in over 70 countries worldwide.
Author: Dede Williams, Freelance Journalist
