US-based Ashland specialty chemicals company is to International Specialty Products (ISP) in a move to increase its global portfolio of functional ingredients.

The acquisition of ISP - a leading global supplier of specialty chemicals for a wide variety of consumer and industrial markets including personal care, pharmaceuticals, beverage, home care, coatings & adhesives, energy, agriculture, plastics and tires - should significantly strengthen Ashland’s functional ingredients division, with new patents and strong teams of research and development scientists.

James O'Brien, Ashland's Chairman and Chief Executive Officer

James O’Brien, Ashland’s Chairman and Chief Executive Officer

This defining transaction enables us to significantly expand our market positions in higher margin, higher growth and less cyclical global markets like personal care and pharmaceuticals. It broadens Ashland’s presence within attractive growth areas like skin, hair and oral care, which are large and fast-growing segments of the $5-billion-plus personal care specialty ingredients market. In addition, we expect to more than double the size of our highest-margin functional ingredients business,” said Ashland Chairman and Chief Executive Officer, James J. O’Brien.

Eventually Ashland expects to realize annualized run-rate cost savings of approximately 50 million US dollars by the second year following the transaction’s close through eliminating redundancies and capturing operational efficiencies.

Under the terms of the stock purchase agreement, Ashland will pay approximately 3.2 billion US dollars for the business in an all-cash transaction, which is subject to regulatory approvals in the EU and the US.

Ashland expects the operation to close prior to the end of the year.