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Hexion Establishes New Company with Momentive Performance Materials

Momentive Performance Materials Holdings Inc., the parent company of Momentive Performance Materials Inc., and Hexion LLC, the parent company of Hexion Specialty Chemicals, Inc., today jointly announced an agreement under which their newly-formed holding companies will merge, creating a global leader in specialty chemicals and materials.

The boards of both holding companies have unanimously approved the merger, which is subject to customary conditions. Closing is anticipated to occur October 1. The new company will operate under the Momentive Performance Materials name.

The capital structures of both Momentive Performance Materials Holdings Inc. and Hexion LLC and their respective subsidiaries will remain separate and in place. Upon closing, with 117 production facilities, more than 10,000 associates, pro forma annualized sales of approximately $7.5 billion and Adjusted EBITDA of $1.24 billion, the new Momentive will be one of the world’s largest specialty chemicals and materials companies. The new company will have operations located to serve all major regions of the world with a broad portfolio of specialty performance products for industrial and consumer markets.

Affiliates of investment firm Apollo Management, L.P. own a controlling interest in both Hexion and Momentive. Based in Columbus, Ohio, Hexion serves industrial customers with a wide range of specialty chemicals. Momentive, based in Albany, New York, provides industrial customers and consumers with silicone- and quartz-based specialty materials.

“We believe the time is right to unify these two companies into a global leader in the specialty materials space,” said Josh Harris, Managing Partner and co-founder of Apollo Management. “Once the transaction is completed, the combined company will be able to provide customers with a full range of specialty chemicals and materials and will have significant operations in virtually all major world markets. The transaction does not require any additional financing and will result in significant synergies that will enhance the financial profile of the new Momentive.”

Craig O. Morrison, Chairman and CEO of Hexion, will become Chairman and CEO of the combined company upon completion of the merger. Dr. Jonathan Rich, President and CEO of Momentive, will join the Board of Directors of the newly formed company and will continue his association with Apollo Management.

In addition, William H. Carter, Executive Vice President & CFO for Hexion, will assume that role in the new company. Tony Colatrella, CFO for Momentive, will assist in the transition. Steven Delarge, President of the Americas for Momentive, will become President of a new global Silicones & Quartz Division within the new Momentive organizational structure.

The new company will be headquartered in Columbus, Ohio, and will maintain a significant presence in Albany, New York, where its silicones business will continue to be headquartered.

“This transaction will forge an industry leader in specialty chemicals and materials, with significant operations in Asia, Europe and the Americas, a broad product and service profile and excellent opportunities for value creation,” Morrison said. “We are excited about the opportunities this transaction will bring to our customers and our associates, and the transformational opportunity we have to create a specialty company of significant size and scale.”

“The complementary technologies of our two companies will enable the combined company to present to customers a full range of innovative solutions for their materials needs,” said Dr. Rich. “The combination will create a leader in cutting-edge solutions serving a wide range of industrial and consumer product needs.”



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