Wednesday, July 20, 2011

Ecolab (ECL) pays $5.4 billion on merger with Nalco; ECL drops 7.37%

Ecolab will pay approximately $5.4 billion, valuing Nalco stock at $38.80 per share. In response to this acquisition, full year EPS forecast was raised to $2.52 to $2.56. Nalco is the world’s largest sustainability service company, concentrated on industrial water, energy and air applications. Their services to customers include energy reduction, water and other natural resource consumption, air quality enhancement, minimizing environmental releases and improving productivity.

Douglas M. Baker, Ecolab’s Chairman, President and CEO, stated, “Nalco's water and oil and gas services end markets in particular represent excellent long term growth potential as the world deals with the quality, cost and availability of those key natural resources.”

Nalco shareholders will have the option of receiving either 0.7005 shares of ECL common stock or $38.80 per Nalco share in cash, without interest. Subject to proration, Nalco shareholders will be approximately 70% in ECL shares and 30 % in cash. The transaction is expected to be completed in the 4th quarter.

On the day: ECL’s dropped $4.08(-7.37%) in reaction to the merger.


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