In a major specialty chemical consolidation, Crompton & Knowles Corp., parent of plastic machinery maker Davis-Standard Corp., will merge with Witco Corp.
Robert Ackley, the top executive at Davis-Standard, said the deal will strengthen the machinery maker.
Crompton & Knowles and Witco announced the deal June 1. The new company, C&K Witco Corp., will become one of the world's largest specialty chemicals manufacturers, with combined sales of about $3.2 billion and about 10,000 employees.
Both firms are based in Connecticut—Crompton & Knowles in Stamford and Witco in Greenwich.
Vincent Calarco, Crompton & Knowles' chairman, president and chief executive officer, said the companies are a good fit in a broad range of customers and geographic markets. ``At the same time, in a consolidating industry, size increases our strategic options and lowers our cost of capital,'' he said.
The companies said they expect the deal to save $60 million a year by the second full year of operation. The deal should close by the third quarter of 1999.
Crompton & Knowles, which already made dyes for clothing, crop-protection chemicals and additives for food and pharmaceuticals, made a major move into specialty chemicals and nearly tripled its sales in 1996 when it merged with Uniroyal Chemical Corp. (Crompton sold the food and pharmaceutical additives business earlier this year.)
On the plastics machinery side, Davis-Standard, with 1998 sales of $345 million, and 1,300 employees, becomes a small part of a specialty chemicals giant. But Ackley, president of Davis-Standard, said his company will gain with a new mix of polymer and rubber chemicals.
``The whole corporation is in a situation now that we have more in common with [other units] — the processing, the customers, the selling and the technology. There's more in common with the Davis-Standard product line than ever before,'' he said. ``It's more in line with polymer processing.''
Davis-Standard, of Pawcatuck, Conn., makes extruders, blow molding machines, recycling machines, wire and cable machines and blown film equipment.
Witco's Polymer Chemicals business accounts for about 25 percent of its sales. Its products include catalysts, additives, organotin and mixed-metal stabilizers, organic peroxides, amide and stearate lubricants, epoxy plasticizers, tin stabilizer intermediates, metal organic products, aluminum alkyls, and methyl aluminum oxane.
Those products go into a variety of markets, such as PVC, plastics packaging, computer housings and other plastic products, and marine paint.