LyondellBasell’s $2.25 Billion Acquisition of A. Schulman, Inc.

Shearman & Sterling LLP is serving as LyondellBasell’s legal counsel, while J.P. Morgan and Dyal Co. are serving as co-financial advisors. Skadden, Arps, Slate, Meagher & Flom LLP is serving as A. Schulman’s legal counsel, while Citigroup Global Markets, Inc. is serving as financial advisor.

LyondellBasell (NYSE: LYB), one of the largest plastics, chemicals and refining companies in the world, and A. Schulman, Inc. (NASDAQ: SHLM), a leading global supplier of high-performance plastic compounds, composites and powders, today announced that they have entered into a definitive agreement under which LyondellBasell will acquire A. Schulman for a total consideration of $2.25 billion. The acquisition builds upon LyondellBasell’s existing platform in this space to create a premier Advanced Polymer Solutions business with broad geographic reach, leading technologies and a diverse product portfolio.

Under the terms of the agreement, LyondellBasell will acquire A. Schulman for a total consideration of $2.25 billion. LyondellBasell will purchase 100 percent of A. Schulman common stock for $42 per share in cash and one contingent value right per share and assume outstanding debt and certain other obligations. In addition, the contingent value rights generally will provide a holder with an opportunity to receive certain net proceeds, if any are recovered, from certain ongoing litigation and government investigations relating to A. Schulman’s Citadel and Lucent acquisitions.

LyondellBasell is using cash-on-hand to finance the acquisition. LyondellBasell expects to achieve $150 million in run-rate cost synergies within two years, primarily by leveraging its well-established approach to cost discipline and productivity, as well as its culture of operational, business and commercial excellence. Further, the acquisition is expected to be accretive to earnings within the first full year following close.

The combined businesses had revenues of $4.6 billion and adjusted EBITDA of $446 million over the last 12 months.

The proposed acquisition, which has been unanimously approved by the respective boards of LyondellBasell and A. Schulman, is subject to customary closing conditions, including regulatory approvals and approval by A. Schulman shareholders. The acquisition is expected to close in the second half of 2018.

The Skadden team includes: M&A partners Marie Gibson (Picture) and Paul Schnell, counsel Timothy Fesenmyer and associate Anya Richter; Executive Compensation and Benefits partner Erica Schohn; Tax partner Victor Hollender; and Litigation partner Paul Lockwood (Wilmington).

 

Involved fees earner: Marie Gibson – Skadden Arps Slate Meager & Flom; Paul Schnell – Skadden Arps Slate Meager & Flom; Timothy Fesenmyer – Skadden Arps Slate Meager & Flom; Anya Richter – Skadden Arps Slate Meager & Flom; Erica Schohn – Skadden Arps Slate Meager & Flom; Victor Hollender – Skadden Arps Slate Meager & Flom; Paul Lockwood – Skadden Arps Slate Meager & Flom;

Law Firms: Skadden Arps Slate Meager & Flom;

Clients: A. Schulman, Inc.;

 

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Author: Ambrogio Visconti