Schulman offers to purchase Ferro Corporation

Compounder and resin supplier A. Schulman Inc. has made a US$563 million cash-and-stock offer to purchase specialty chemical maker Ferro Corporation – an offer that Ferro has rejected.

Schulman put the total value of the deal at US$855 million, including debt. It said that its offer was based on publicly available information about Ferro and that it would consider adjusting its offer if it was able to get greater visibility into the company’s operations.

“A. Schulman and Ferro are both recognized leaders in specialty chemicals with value-added product lines, similar business models, complementary competencies, markets and applications,” said Joseph M. Gingo, chairman, president and CEO of Fairlawn, Ohio-based Schulman. “We believe our combination will deliver superior value to our respective shareholders and offer better value to customers, and we would welcome the opportunity to engage in a mutually beneficial dialogue with Ferro’s Board and management.”

Schulman said it first contacted Ferro in November, and that it had expressed its “strong intent” in pursuing a deal in a letter to Mayfield Heights, Ohio-based Ferro on February 13. Ferro’s board “rejected A. Schulman’s offer and expressed their belief that the company should remain independent,” Schulman said in a press release.

“We request the Ferro Board reconsider their expressed position to remain independent. We also encourage Ferro shareholders to communicate with their Board, and ask them to re-examine their decision regarding our offer,” Gingo said in the news release. ”We believe that our offer will bring attractive and timely value creation to both Ferro and A. Schulman shareholders.”