Specialty and advanced materials company
Rockwood Holdings Inc.
) recently secured the green signal from the government of
Australia's Foreign Investment Review Board for its impending
takeover of Talison Lithium Limited.
With this approval, the New Jersey-based company has received all
the required regulatory clearances for the transaction. It
expects to wrap up the acquisition by mid-December.
Rockwood, in August 2012, entered into an agreement to buy
Talison for C$724 million (roughly $732 million) to boost the
production of lithium used in batteries and smartphones. The deal
is, however, subject to the approval of Talison shareholders. The
company expects its shareholders to vote in favor of the deal in
a meeting on November 29.
Talison is a leading global producer of lithium, and supplies its
customer network from the Greenbushes Lithium Operations in
Western Australia. Rockwood believes that the acquisition will
help expand its lithium business and enable it to better serve
its existing customers as well as Talison's customers in China
and rest of the world. The company plans to finance the
acquisition using its cash in hand and new debt.
Rockwood released its third-quarter 2012 results last month. Its
reported profit (from continuing operation) fell roughly 19% year
over year to $61.6 million or 77 cents per share on lower sales.
Revenues dipped roughly 8% year over year to $862.8 million, hurt
by negative currency translation. Rockwood saw weak demand in its
titanium dioxide (TiO2) business in the quarter.
The company recorded higher sales from its lithium business,
helped by better pricing and increased volumes of lithium
carbonate. However, sales fell in the surface treatment business
due to negative currency impact. Declines were also witnessed
across performance additives, TiO2 pigments and advanced ceramics
Rockwood expects demand for TiO2 to remain soft in the fourth
quarter. However, it sees continued strength in its lithium
Rockwood, which competes with
PPG Industries, Inc
Sigma Aldrich Corporation
), currently retains a Zacks #4 Rank, reflecting a short-term (1
to 3 months) Sell rating.
PPG INDS INC (PPG): Free Stock Analysis
ROCKWOOD HLDGS (ROC): Free Stock Analysis
SIGMA ALDRICH (SIAL): Free Stock Analysis
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