Rockwood Holdings (ROC) Up on Purchase By Albemarle

Shares of Princeton, New Jersey, based Rockwood Holdings, Inc. (ROC) rose on Tuesday, on a mixed day on Wall Street. Rockwood Holdings stock was up 9.83%, rising $7.44 per share to close at $83.14 on volume of 23,112,334 shares. Specialty chemical conglomerate, Albemarle Corp. (ALB), announced that it will buy Rockwood Holdings in a deal valued at $6.2 billion.

Founded in 2000, Rockwood Holdings, Inc. develops, manufactures and markets specialty chemicals used for industrial and commercial purposes.

The company operates through two segments: Lithium and Surface Treatment. In 2013 the company had net earnings of $413.17 million on total revenues of $2.62 billion, and employs 4,231 workers.

Under the terms of the buyout, Albemarle shareholders will own 70% of the combined company, while Rockwood shareholders will own the remaining 30%. Each Rockwood share will be exchanged for $50.65 in cash and 0.48 a share of Albemarle common stock. The purchase is expected to go through in the first quarter of 2015. Albemarle CEO Luke Kissam will be the CEO of the newly combined company.

Albemarle Corp's stock closed down 3.57%, or $2.59 per share to close at $70.03, on news of the buyout. Albemarle Corp. develops, manufactures and markets chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, transportation, pharmaceuticals, crop production, food-safety and custom chemistry services.

Rockwood Holdings lithium segment is the prize for Albemarle. Rockwood is one of the worlds largest producers of lithium, and one of four companies that control 90% of the global market. Lithium is a lightweight metal that's a key component of the power systems in both electric cars and smartphones, as well as other power driven products. Fast increasing sales of electric cars powered by lithium batteries is increasing the demand for lithium. Lithium demand is expected to double by 2017, and to quadruple by 2020.

Electric cars (as opposed to hybrid vehicles) contain 44 pounds of lithium carbonate in their battery packs, and the demand for lithium will surge along with rapidly rising sales of all-electric vehicles. According to CEO Luke Kissam,

Published on Jul 16, 2014
By Kevin Mercadante

Copyrighted 2020. Content published with author's permission.

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