Ashland completes global expansion into specialty chemicals

Ashland Inc. completed its $3 billion agreement to buy Hercules Inc.  catapulting the company into a global leadership position in the arena of specialty chemicals. Covington, Kentucky based Ashland will get a big boost in the water-treatment market, primarily serving the pulp and paper industry.  Other key water treatment markets will be targeted, including municipal, industrial and marine. The acquisition will create three new businesses for Ashland: specialty additives and ingredients; paper and water technologies; and specialty resins, giving it the core of a major specialty chemicals business. "The acquisition of Hercules fulfills our objective to become a leading specialty chemicals company," says Ashland CEO James O'Brien. Ashland anticipates approximately $120 million in annual run-rate savings by eliminating redundancies and capturing operational efficiencies by the end of fiscal year 2010.

The company says specialty chemicals will become its key business for future growth, with profits from the sector expected to account for nearly 75 percent of the company's overall earnings.

Writer: David Holthaus

Source: James Vitak, Ashland