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Lubrizol completes Noveon acquisition, unveils new structure

By Patrick Raleigh UT On-line/news editorCleveland, Ohio-Lubrizol Corp has completed its $1840-million acquisition of Noveon International Inc. and announced a new structure consisting of two operating segments: Lubrizol Additives and Noveon.The Noveon segment is to include complementary businesses from Lubrizol’s Fluid Technologies for Industry (FTI) division. These include additives and specialty resins for coatings and inks, ingredients for personal care products, additives for foam control and other process chemicals. Donald Bogus, who led the FTI division, has taken over as president of Noveon. However, Lubrizol has stated that all Noveon business units are to continue under their existing general managers. These include Julian Steinberg as head of the Estane TPU (thermoplastic polyurethanes) business, and Cornelis Kees Verhaar, in charge of Noveon Performance Coatings. “The continuity of the Noveon management team is enabling a seamless integration for our customers and employees. We are looking forward to contributing to the future of the new Lubrizol,” commented Bogus.The new structure will promote accountability, encourage innovation and focus on commercial results, according to James Hambrick, Lubrizol’s president and chief executive officer. “Our new management team is excited about our ability to focus and dedicate our realigned capabilities more fully to the lubricants and fuels business,” Hambrick added in a 3 June statementReviewing current trading conditions, Hambrick noted that both Lubrizol Additives and Noveon are implementing price increases to address rising raw material costs. “The high cost of petrochemical raw materials is a serious concern,” he said. The group expects Noveon to contribute to its cash flow and earnings per share within 12 months and the acquisition to result in cost synergies of $40 million over the next three years. The savings, it said, will stem from savings in raw materials, rationalisation of manufacturing operations and other consolidation opportunities.Noveon complements Lubrizol’s existing businesses in fluid technologies and expands its position in the personal care and speciality coatings markets, Lubrizol has previous stated. Noveon last year posted sales of $1200 million from a portfolio including; thermoplastic polyurethanes, reactive liquid polymers for engineering adhesives, water-borne acrylic coatings and chlorinated PVC, as well as ingredients used in personal care products.Wickliffe, Ohio-based Lubrizol reported 2003 sales of $2000 million from the supply of speciality additives and fluid technologies for various applications. End-use products include engine lubricants and fuel; hydraulic fluids and emission control systems; greases and industrial fluids; personal care products and industrial cleaners; paints, coatings and inks; and mining chemicals.”



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