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Houghton International, a subsidiary of the Hinduja Group-owned Gulf Oil International, has entered into a definitive agreement to merge with NYSE-listed Quaker Chemical to create a global leader in the space of process fluids and speciality chemical.
The Hinduja conglomerate will be the largest shareholder in the combined public company. GOCL Ltd, an India listed entity, which owns 10 per cent equity in Houghton International, through its UK-based subsidiary, HGHL Holdings Ltd UK, will be entitled to two per cent equity in the newly formed merged entity.
Under the terms of the agreement, Houghton International shareholders will receive about 4.3 million shares of newly issued Quaker Chemical stock, representing 24.5 per cent ownership of the combined company and $172.5 million in cash.
In addition, Quaker Chemical will assume Houghton International’s net debt of about $690 million.
The agreement has been approved by both Quaker Chemical's board of directors and Houghton International’s board of directors with the full support of the Hinduja Group, said the company in a statement on Wednesday.
For 2016, Houghton International had revenue of $767 million, $120 million of adjusted EBIDTA and a net debt of $690 million, while Quaker Chemical had revenue of $747 million, $107 million of adjusted EBIDTA and $22 million of net cash during the same period.
After the close of the transaction, shares of the combined company will continue to be listed on the New York Stock Exchange.
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