Transaction will create the global leader in
water, hygiene and energy technologies and services, strengthening the
long-term growth position
Closing is pending final regulatory clearance
ST. PAUL, Minn.--(BUSINESS WIRE)--
Shareholders from both Ecolab Inc. and Nalco Holding Company
overwhelmingly approved the merger of the two companies today. The
merger will create the global leader in water, hygiene and energy
technologies and services, offering premier product solutions, the
industry's largest and best-trained sales and service force, coverage in
more than 160 countries, and combined 2011 annualized sales of more than
$11 billion.
"We are extremely pleased by the shareholder approval of this merger
with Nalco and are excited by the terrific opportunities it brings to
our customers, shareholders and employees," said Douglas M. Baker, Jr.,
Ecolab chairman and chief executive officer. "As one company, we will
strengthen our opportunities and capabilities to provide customers with
the most innovative, integrated and cost-effective solutions.
"Our combined company will bring the best—in-class water and hygiene
technology, enabling us to uniquely meet the growing global needs around
food safety, infection prevention, water management and energy
availability. Meeting these needs is fundamental for successful
societies and provides an excellent platform for us to both deliver
meaningful value for our customers and provide excellent growth
opportunities for our associates and shareholders.
"Nalco brings a strong management team and organization with leadership
positions in the critical water and energy markets, where expanding
global demand creates significant growth opportunities. Nalco is the
global leader in these industries, with products and services providing
the most effective and efficient solutions for customers. These will
combine with Ecolab's leadership positions in the food safety and
healthcare markets, where increasing global demand for improved
sanitation and sustainable solutions creates strong long-term needs that
we are uniquely positioned to meet for our customers."
More than 99% of the shares voted by Ecolab's shareholders at Ecolab's
special meeting were cast in favor of Ecolab's issuance of shares of its
common stock to Nalco's shareholders under the terms of the merger
agreement, which was announced on July 20, 2011. In addition,
shareholders also overwhelmingly approved the proposal to amend the
company's restated certificate of incorporation in order to increase to
800 million the number of authorized shares of common stock available
for issuance.
Based on Ecolab's recent share price, the total transaction value will
be approximately $8.3 billion, including a fully-diluted offer value of
$5.6 billion for Nalco's equity and $2.7 billion on the assumption of
Nalco's net debt.
Closing will be completed upon receipt of final regulatory clearances
and the fulfillment of other customary closing conditions. All
regulatory clearances required to complete the merger have been received
except with respect to China antitrust. We expect the merger to close
prior to the end of 2011.
Under the terms of the transaction, Nalco shareholders have the option
to receive either 0.7005 shares of Ecolab common stock or $38.80 per
Nalco share in cash, without interest, subject to proration such that
approximately 70% of Nalco's outstanding shares will be converted into
the right to receive shares of Ecolab common stock and 30% of Nalco's
outstanding shares will be converted into the right to receive cash. In
aggregate, Ecolab will issue approximately 68.3 million shares of Ecolab
stock and pay approximately $1.6 billion in cash to Nalco shareholders.
Ecolab previously announced that it intends to undertake a $1 billion
share repurchase following the closing of the transaction. The
repurchase program is expected to be completed by year-end 2012.
Upon completion of the merger, Erik Fyrwald, the chairman and chief
executive officer of Nalco, will be named president of Ecolab, reporting
to Baker. Other key Nalco executives expected to join the Ecolab
leadership team are David Flitman, executive vice president and
president, Global Water and Process Services; and Steve Taylor,
executive vice president and president, Global Energy Services.
Upon completion of the merger, Ecolab's global headquarters will remain
in St. Paul, and the company will continue to have a significant
presence in Naperville, Ill.
With sales of $6 billion and more than 26,000 associates, Ecolab (NYSE:
ECL) is the global leader in cleaning, sanitizing, food safety and
infection prevention products and services. Ecolab delivers
comprehensive programs and services to the foodservice, food and
beverage processing, healthcare, and hospitality markets in more than
160 countries. More news and information is available at www.ecolab.com.
Cautionary Statements Regarding Forward-Looking Information
This
communication contains certain statements relating to future events and
our intentions, beliefs, expectations and predictions for the future
which are forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Words or phrases such
as "will likely result," "are expected to," "will continue," "is
anticipated," "we believe," "we expect," "estimate," "project," "may,"
"will," "intend," "plan," "believe," "target," "forecast" (including the
negative or variations thereof) or similar terminology used in
connection with any discussion of future plans, actions or events
generally identify forward-looking statements. These forward-looking
statements include, but are not limited to, statements regarding the
expected closing of the merger, benefits of the merger, integration
plans and expected synergies,anticipated future financial and operating
performance and results, including estimates for growth, and share
repurchases. These statements are based on the current expectations of
management of Ecolab and Nalco. There are a number of risks and
uncertainties that could cause actual results to differ materially from
the forward-looking statements included in this communication. These
risks and uncertainties include (i) problems that may arise in
successfully integrating the businesses of the companies, which may
result in the combined company not operating as effectively and
efficiently as expected, (ii) the possibility that the merger may
involve unexpected costs, unexpected liabilities or unexpected delays,
(iii) the risk that the credit ratings of the combined company or its
subsidiaries may be different from what the companies currently expect,
(iv) the risk that the businesses of the companies may suffer as a
result of uncertainty surrounding the merger and (v) the risk that
disruptions from the transaction will harm relationships with customers,
employees and suppliers.
Other unknown or unpredictable factors could also have material adverse
effects on future results, performance or achievements of Ecolab, Nalco
and the combined company. For a further discussion of these and other
risks and uncertainties applicable to the respective businesses of
Ecolab and Nalco, see the Annual Reports on Form 10-K of Ecolab and
Nalco for the fiscal year ended December 31, 2010 and the companies'
other public filings with the Securities and Exchange Commission, or
SEC. These risks, as well as other risks associated with the merger, are
more fully discussed in the joint proxy statement/prospectus included in
the Registration Statement on Form S-4 that Ecolab has filed with the
SEC in connection with the merger, which was declared effective by the
SEC on October 28, 2011. In light of these risks, uncertainties,
assumptions and factors, the forward-looking events discussed in this
communication may not occur. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date of this communication. Neither Ecolab nor Nalco undertakes, and
each of them expressly disclaims, any duty to update any forward-looking
statement whether as a result of new information, future events or
changes in their respective expectations, except as required by law.
(ECL-A)
Ecolab Inc.
Michael J. Monahan, 651-293-2809
Source: Ecolab Inc.
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