Lonza To Acquire Arch Chemicals

Lonza Group Ltd. and Arch Chemicals, Inc. signed an agreement pursuant to which Lonza has agreed to commence a tender offer for 100% of Arch Chemicals’ outstanding shares of common stock at a price of $47.20 per share in cash.

Lonza’s offer represents a 36.7% premium to Arch Chemicals’ average closing price over the last 30 trading days. Based on the offer price for all the outstanding shares, Arch Chemicals’ enterprise value would be $1.4 billion (approximately CHF 1.25 billion).

Lonza’s cash offer is subject to customary conditions including the tendering of more than two-thirds of Arch Chemicals’ outstanding shares of common stock and clearance from antitrust regulatory authorities. Lonza expects to commence the tender offer by July 15, 2011 and to complete the tender offer later in 2011.

Stefan Borgas, CEO of Lonza, said, “This transaction represents an excellent strategic and cultural fit. Lonza and Arch Chemicals offer highly complementary products and technologies and together will be the global leader in controlling unwanted microbes. The business will enjoy a strong platform for accelerated future growth for the benefit of all our stakeholders.”

The global microbial control market is currently valued at approximately $10 billion, and is growing at approximately 4-6% per annum. The key end-use segments of the market—water treatment, hygiene, materials protection and personal care—are growing at faster rates. The largest markets are North America, Europe and Japan. The fastest growing microbial control markets are Brazil, India, China and South Africa.