NEW YORK (AP) -- Chemicals maker Ashland Inc. has completed its $2.6 billion acquisition of paint thickener and paper chemicals manufacturer Hercules Inc.
As part of the deal, first struck in July, each Hercules share will be exchanged for $18.60 cash and 0.093 shares of Ashland common stock, and Ashland will assume about $700 billion in debt.
"This transaction better positions Ashland to deliver more stable and predictable earnings, generate stronger cash flows and gain access to higher growth markets worldwide, most especially those in emerging economies," James J. O'Brien, Ashland's chairman and chief executive, said in a statement.
The maker of Valvoline lubricants will remain headquartered in Covington, Ky. Ashland said it expects to save about $120 million per year by the end of fiscal 2010 by eliminating redundancies and becoming more efficient. The combined company will feature five units, including water technologies, performance materials, aqualon functional ingredients, consumer markets and distribution.
Ashland said its expanded international presence will boost non-North American revenue to about 35 percent of total sales for the 12 months ended Sept. 30.
The cash portion of the transaction was funded through cash on hand and debt financing from Bank of America and Scotia Capital. Citigroup Global Markets Inc. acted as financial adviser to Ashland and Credit Suisse Securities (USA) LLC acted as financial adviser to Hercules.
In the past 52 weeks shares of Ashland have traded between $16.73 and $58.58, and shares of Hercules have traded between $12.59 and $22.