South Korean company to buy $1.6B stake in Kraton Corp.

Stockholders of Kraton Corp. approved plans to be acquired by DL Chemical Co. Ltd. (Photo by Michele Newbanks)

From Staff Reports

BELPRE — Stockholders of Kraton Corp. recently approved the proposed acquisition of the company by DL Chemical Co. Ltd

According to a Pulse News press release, DL Chemical Co., the world’s largest producer of polybutene and a subsidiary of South Korea’s DL Holdings Co., will acquire a full stake in U.S. chemicals company Kraton Corp. for $1.6 billion, a deal that will cement the Korean chemical company’s leading position in the global petrochemical industry.

DL Chemical representatives said its board decided to buy a 100 percent stake in Kraton for $1.6 billion in an all-cash transaction. Under the terms, Kraton stockholders will receive $46.5 in cash for each share of Kraton common stock they own. The Korean company will pay the acquisition with its own cash and loans from financial institutions with an aim to complete the acquisition in the first half of next year.

In a U.S. Securities and Exchange Commission filing, it was noted if the merger is completed, Kraton will become an indirect, wholly-owned subsidiary of DL Chemical Co. Ltd.

“We are pleased that our stockholders have voted overwhelmingly in favor of the merger with DL Chemical,” said Kevin M. Fogarty, Kraton’s president and chief executive officer in a press release. “We believe the transaction provides significant value for Kraton stockholders, and that the ownership of Kraton by DL Chemical will extend Kraton’s global reach and provide a broad platform for further investment in, and expansion of, Kraton’s product offerings for the benefit of all of Kraton stakeholders.”

In polymer sector, Kraton is a leading supplier of styrene block copolymer in the U.S. and Europe. SBC is an advanced technology material vital in producing sanitary adhesions, medical equipment material, vehicle interior material, and fifth-generation mobile communications cable. SBC produced by Kraton is of high quality and added value among synthetic rubbers, DL Chemical said.

Kraton is also a major bio chemical company that produces chemical products with refined by-products from the process of pine tree pulp production. Its annual bio chemical production capacity amounts to 700,000 tons. Materials include environmentally-friendly fuel, high-functional tire material, and green adhesives.

“We have been highly interested in Kraton’s specialty polymer and bio-based chemical business, and this combination will allow us to provide our customers with a wider range of innovative products, while adding the ability to serve a diverse range of end markets in over 70 countries worldwide,” said Kim Sang-woo, vice chairman and chief executive of DL Chemical in a statement.

The Korean company plans to actively localize key materials based on over 800 patents owned by Kraton.

It has not been announced how the acquisition will affect the Belpre plant. Representatives from the Belpre plant declined to comment, referring all calls to Gene Shiels, director of investor relations, and Kristin Boyd, communications director.


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