The merger aims to create a global leader in the area of specialty chemicals and materials with an estimated annual turnover of $7.5bn and will trade under the Momentive Peformance Materials name.
The executive boards of both companies have agreed to the merger, which is subject to the customary approval regulations, and the closure of the deal is expected to be on October 1.
In a press statement the two companies said that the existing capital structures for each business would remain in place and separate, with a total of 117 production facilities and a workforce of over 10,000, worldwide.
Currently affiliates of investment firm Apollo Management own a controlling interest in both Hexion and Momentive.
“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,” said Josh Harish, managing partner and co-founder of Apollo Management.
With the completion of the deal, Craig Morrison, currently CEO and chairman of Hexion, will assume the position of CEO and chairman of the combined companies, while Dr. Jonathan Rich, president and CEO of Momentive, will assume a role on the new board of directors.
New York-based Momentive is a manufacturer and supplier of silicones, adhesives, sealants and quartz to a range of industries, while Ohio-based Hexion is the world’s largest manufacturer and supplier of binder, ink, resins and adhesive coatings for a variety of industrial applications.
The combined company will assume its headquarters in Colombus, Ohio, but the existing Momentive headquarters in Albany, New York, will continue to serve as the business headquarters for the company’s silicone operations.
Momentive serves the packaging industry and is also a significant supplier of silicones to the cosmetics and personal care industry.
Its silicones are used in a range of personal care products, from color cosmetics and hair care to skin care, shower & bath and skin care, providing a range of functions including emulsifiers and conditioning agents.
This year the company launched two new silicone-based ingredients for use in personal care applications.
Silsoft AX is a conditioning agent targeted for use in hair care products, and Tospearl AQ is a silicone microsphere-based ingredient aimed at the skincare market.
The second addition to the company’s personal care portfolio is Tospearl AQ; silicone microspheres coated with a cationic polymer.
According to the company, the two materials together offer a hybrid performance. Typically, the cationic polymer aids water dispersibility, contributing to the improved sensory experience and the silicone particles can help enhance the blurring of fine lines and wrinkles.