Hexcel Corp. shareholders get their say Feb. 21 on the advanced materials industry's next big consolidation. At their first official meeting since May 1993, the shareholders will vote on whether to nearly double Hexcel's outstanding shares and whether to acquire Ciba-Geigy Ltd.'s composites division.
Hexcel had 18,091,354 shares outstanding as of Dec. 27. Hexcel plans to issue 18,019,133 new shares to Ciba, representing 49.9 percent of the total. Standstill provisions will keep Ciba from taking further control.
Hexcel would pay to Ciba $25 million in cash and about $43 million in senior subordinated debt due in 2003 and initially bearing annual interest of 9 percent. On Feb. 7, shares of Hexcel common stock closed at $12 and, over 52 weeks, had traded at a high of $12.25 and a low of $4.13.
Since being announced in July, the Hexcel-Ciba deal has moved slowly through a maze of regulatory, logistical and cultural hurdles. Extensive restructuring is expected in line with the trend toward consolidation.
Structural materials supplier Hexcel of Pleasanton, Calif., will be the surviving entity. Hexcel Chief Executive Officer John J. Lee will become chairman and CEO, and Ciba's Juergen Habermeier will become president and chief operating officer.
The composites division represents 1.8 percent of the sales of Ciba-Geigy Ltd. of Basel, Switzerland. Ciba has interests in health care, agrochemicals and industrial chemicals.
Hexcel anticipates taking up to three years to merge the businesses, reduce excess plant capacity and improve operating efficiencies. Sales for 1995, if combined, would have exceeded $600 million. More than 4,500 employees are involved.