DL Chemical to acquire Kraton in $2.5bn deal

Kraton Corporation entered into a merger agreement under which DL Chemical will acquire 100% of Kraton in an all-cash deal, implying an enterprise value of $2.5bn, the company said on Monday.

Per the agreement, Kraton stockholders will receive $46.50 in cash for each share of Kraton common stock they own.

The deal represents a premium of 50% over Kraton’s unaffected market valuation as of early July.

DL Chemical has shown interest in Kraton’s specialty polymer and bio-based chemical business and could allow them to provide its customers with a wider range of products and serve a diverse number of end markets, it said.

"DL Chemical has been conducting the petrochemical business responsibly within the DL Group for 46 years. After acquiring Kraton's Cariflex business last year, we have successfully integrated that business within the DL Group," said Sang Woo Kim, vice chairman and CEO of DL Chemical.

Kraton’s Board of Directors have unanimously approved the merger agreement and recommended that stockholders vote in favour of the transaction.

“[This] announcement marks the culmination of the strategic review process for Kraton, resulting in a transaction that we believe provides significant value for... stockholders,” said Dan Smith, chairman of Kraton’s board of directors.

The acquisition is subject to certain customary closing conditions, including the receipt of stockholder and regulatory approvals, and is expected to close by the end of the first half of 2022.