Quaker Chemical, Houghton International Combine Companies

The resulting business is said to offer one of the largest portfolios of metalworking fluids.

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Quaker Chemical Corp. and Houghton International Inc., companies with a combined 250-year history as providers of process fluids, chemical specialties and technical expertise to the global primary metals and metalworking industries, have executed a definitive agreement to combine the companies. Both companies are headquartered in the Philadelphia area.

“The proposed combination of Quaker Chemical and Houghton International represents the next phase of our evolution, and stays true to the vision of growing in our core specialties,” says Michael F. Barry, chairman and CEO of Quaker Chemical. “Joining forces with Houghton International combines two highly complementary businesses, each having a long history of building tremendous expertise, technology and customer-centric cultures dedicated to delivering long-term sustainable value to customers, shareholders and associates. The new company will capitalize on best practices and expertise from both businesses.”

Sanjay Hinduja, chairman of Houghton International, which is owned by the Hinduja Group through its Gulf Oil business, says, “We are pleased to enter this agreement to unite these two distinguished and global companies.”

Under the terms of the agreement, Houghton International shareholders will receive $172.5 million of cash and 24.5 percent ownership of the combined company, representing approximately 4.3 million shares of newly issued Quaker Chemical stock. In addition, Quaker Chemical will assume Houghton International’s debt and cash, with net debt of approximately $690 million at year-end 2016. The agreement has been approved by both companies’ boards of directors with full support of the Hinduja Group, which will become Quaker Chemical’s largest shareholder.

The business will have one of the world’s most expansive metalworking platforms comprised of specialty products that include removal fluids, forming fluids, protecting fluids, heat treating fluids, industrial lubricants and greases. The expanded portfolio is expected to generate significant cross-selling opportunities and allow further expansion into growth markets that include India, Korea, Japan and Mexico.