2005 Archives

DC Chemical and One Equity Partners to acquire Columbian Chemicals Company

DC Chemical and One Equity Partners to acquire Columbian Chemicals Company, the world’s 3rd largest carbon black manufacturer, from Phelps Dodge Corporation

DC Chemical Co., Ltd. (“DCC”), a leading Korean chemical company, and One Equity Partners LLC (“OEP”), a private equity arm of JPMorgan Chase & Co., entered into a definitive agreement on Tuesday, November 15, with Phelps Dodge Corp. (“PD”) to acquire Columbian Chemicals Co. (“CCC”) from Phelps Dodge. DCC and OEP have set up an operating joint venture to acquire CCC. The transaction is subject to regulatory approvals.

In addition to its investment in CCC, OEP will also invest approximately US$100 million in DCC, through the subscription of newly issued equity and bonds-with-warrants.

CCC is among the world's largest producers of rubber and industrial carbon black products. Rubber carbon blacks add strength, durability and improved performance to tires and mechanical rubber goods, while industrial carbon blacks provide improved coloring and electrical properties for inks, paint, plastics, electric cable insulation and other products. The company is headquartered in Marietta, Ga., and currently operates 12 manufacturing facilities in nine countries, including the US, Canada, Korea, Brazil, Hungary, Germany, Italy, Spain and the UK. The tire sector consumes approximately 70 percent of global carbon black production, and various rubber industries, such as tube and industrial rubber, and pigments for plastics, ink and paint account for the remainder.

Customers of DCC and CCC, including tire manufacturers, continue to expand their global presence, especially in emerging markets. The business combination will enable DCC and CCC to provide their global customers with a broad line of high quality products from plants located in close proximity to their operations. Significant investments are planned for locations including Brazil, China and Hungary.

DCC is a major producer of various industrial and chemical products, including carbon black, pitch, phthalic anhydride, BTX, hydrogen peroxide, soda ash and TDI. DCC is headquartered in Seoul, Korea and currently employs 1,730 employees. DCC has various production facilities in China, the US, Vietnam, Indonesia and the Philippines. DCC has 11 subsidiaries/affiliates, mostly focusing on specialty chemicals and other related businesses.

OEP manages $5 billion of investments and commitments for JPMorgan Chase & Co. in direct private equity transactions. Partnering with management, OEP invests in transactions that initiate strategic and operational changes in businesses to create long-term value. OEP has offices in New York, Chicago and Frankfurt.

Phelps Dodge, headquartered in Phoenix, AZ, is one of the world's leading producers of copper and molybdenum, the largest producer of molybdenum-based chemicals and continuous-cast copper rod, and among the leading producers of magnet wire and carbon black. The company’s two divisions, Phelps Dodge Mining Co. and Phelps Dodge Industries, employ more than 15,500 people worldwide.