Feb

Ferro Joint Venture in China to Supply Rare-Earth-Based Compounds for Glass Polishing Market

Ferro Corporation announced today that it has entered into a joint venture agreement with Baotou Jin Meng Rare Earth Co., LTD, a refiner of rare earth materials in Baotou, China.

The joint venture business, Ferro Jinmeng (Suzhou) Polishing Materials Co., Ltd, will focus on the manufacture and sale of cerium oxide-based polishing materials in China. These ultra-fine, highly engineered materials are used to polish LCD glasses and cover glasses of electronic devices such as smart phones and tablet computers. Ferro will hold a majority ownership interest in the business.

Baotou Jin Meng Rare Earth Co., LTD will provide access to high-quality rare earth compounds from its refining operations in Baotou, while Ferro’s Surface Technologies business will bring its manufacturing technology, market and applications requirement knowledge to the new business venture. The business will be registered in Suzhou, China. Manufacturing will take place in Suzhou Office Park, where Ferro has state-of-the-art manufacturing facilities. The joint venture project is subject to approval by regulatory authorities. Ferro expects manufacturing to begin in the second half of 2012.

“Our Surface Technologies business has seen strong growth as a global supplier to the advanced glass polishing segment. By joining with Baotou Jin Meng Rare Earth, we look forward to accelerating that growth through providing the fast-growing Chinese market with leading edge products,” said Jeffrey Edel, Global Business Director, Ferro Electronic Materials.

“Our joint venture business will combine local raw material sourcing, local production and local applications support − a big win for this market at a time when demand has been surging for products incorporating LCDs and specialty cover glasses,” said Jai Subramanian, Global Business Manager, Ferro Electronic Materials. Mr. Sun Xiping, President of Baotou Jin Meng Rare Earth Co., LTD, stated, “We are excited to partner with a global technology leader in the glass polishing segment of the market.”

A Schulman abandons pursuit of Ferro

US plastic compounds and resins supplier A Schulman Inc said it had decided to give up efforts to buy Ferro Corp, after the domestic speciality materials and chemicals maker's board refused to discuss its offer. Reuters cited A Schulman's CEO Joe Gingo as saying in a conference call with analysts that his company gave enough time to Ferro's board to enter negotiations, but so far that has not happened.

A Schulman, which some four months ago proposed to buy Ferro for USD563m (EUR433m), will seek other deal opportunities, Gingo added. The suitor, which saw a potential deal with Ferro to help it reduce costs and bring it new customers, first approached its target in November last year, expressed interest in February and made a formal bid in March only to see all its attempts rejected. Country:

A. Schulman Requests Ferro Corporation Board To Enter Into Serious Negotiations On Proposed Acquisition In The Best Interests Of Ferro Shareholders

A. Schulman, Inc. and its Board of Directors stated today that it continues to encourage the Ferro Corporation Board of Directors to seriously consider its previously announced offer to acquire Ferro.

As announced on March 4, 2013, A. Schulman has made a proposal to acquire all of the outstanding shares of Ferro common stock for per-share consideration of $6.50, representing a 25% premium that day, and has expressed its willingness to adjust its initial offer as warranted by a customary due diligence process. The offer was flatly rejected by the Ferro Board in a brief note without further discussion or the opportunity for A. Schulman to conduct due diligence.

"Contrary to what the Ferro Board of Directors stated in a letter to Ferro shareholders dated April 18, 2013, our proposal is not a 'low-ball' offer, and we have publicly stated that we are open to revising the terms and structure of our initial offer, provided we are given an opportunity to conduct customary due diligence and engage in a meaningful dialogue with Ferro," said Joseph M. Gingo, Chairman, President and Chief Executive Officer of A. Schulman. "We have been and continue to be disappointed by the Ferro Board's refusal to talk, evidently driven by their stated desire to 'stay independent.' Ferro has chosen to misrepresent our position, has made unsubstantiated and inaccurate statements about A. Schulman's ability to complete the acquisition, and has not mentioned the overwhelming support from both Ferro and A. Schulman shareholders for consideration of our proposal. As a result, we feel obligated to set the record straight and respond to these inaccuracies."

A. Schulman Offer Represents Significant Premium to Ferro's Recent Stock Price
Far from trying to "lure Ferro into low-ball negotiations," A. Schulman's proposal represents premiums of 21%, 32%, 44% and 64%, respectively, to Ferro's 30-, 60-, 90- and 180-day volume weighted average prices prior to March 4, 2013, when the offer was publicly disclosed. It also represents a 173% premium to the 52-week low for Ferro, which was as recent as November 16, 2012.

A. Schulman's intention in publicly disclosing the offer was simply to allow Ferro shareholders to both understand and weigh in on a business combination which A. Schulman believes would create substantial value for both companies' shareholders.

Shareholders of Both Ferro and A. Schulman Express Support
Representatives of A. Schulman have spoken directly to Ferro shareholders representing approximately 50% of total Ferro ownership, and a large majority of them indicate that the Ferro Board should not have summarily rejected the offer by stating "the board does not wish to explore your proposal further" and should have engaged in negotiations, as A. Schulman has requested.

This support is also reflected by the performance of Ferro's stock, which rapidly climbed from $5.20 to $6.80 per share on the day of the announcement of the offer, representing a 31% gain in shareholder value on that day alone. A. Schulman believes a significant reason for the gain in Ferro's stock price is the investment community's positive reaction to a potential transaction, rather than an overnight endorsement of Ferro's current cost cutting measures.

In addition, conversations with A. Schulman's own shareholders indicate overwhelming support for the Company's attempts to acquire Ferro, with no concerns about dilution, contrary to what the Ferro Board implies in its letter.

A. Schulman Brings Financial Strength and Projected Synergies
Also, despite the disingenuous and misleading assertions of Ferro's Board, A. Schulman's financial strength and the Company's ability to carry out its offer should not be called into question. A. Schulman's strong balance sheet and low debt to capital ratio of 30% as of February 28, 2013, coupled with its proven ability in cash flow generation, clearly indicate that the Company has the financial capability to successfully complete the acquisition in a timely manner.

A. Schulman continues to believe that it can significantly exceed the latest stand-alone cost cutting measures targeted by Ferro in its April 8, 2013 press release. As announced previously, A. Schulman expects the transaction to generate annual synergies of $35 million, without execution risk, in addition to Ferro's projected cost cutting measures. A. Schulman believes that with its broader product, manufacturing and financial footprint and history of successful acquisition integration, its restructuring targets have a much higher likelihood of success.

Strategic Combination Delivers Strongest Value Creation
Gingo concluded, "We are highly confident that our balance sheet strength would allow us to significantly increase the cash component of our proposal if desired by the Ferro Board. Furthermore, based on our extensive and ongoing conversations with the financial community, we have the utmost confidence that the transaction can be completed in a timely fashion. We would be pleased to engage with the Ferro Board if they would be prepared to offer us an opportunity to provide comfort around the various risks they perceive with our proposal.

"We reiterate our call for Ferro's Board to enter into serious discussions with A. Schulman regarding our offer, and we are hopeful that the Ferro Board will engage us following Ferro's annual meeting and election of directors on May 15, if not sooner. We strongly believe, and are committed to demonstrating, that the combination of A. Schulman and Ferro is the best value creation strategy for shareholders of both companies."

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A. Schulman, Inc. announced today that it has made a proposal to the Board of Directors of Ferro Corporation to acquire all of the outstanding shares of Ferro common stock for per-share consideration of $6.50, representing an estimated total enterprise value of approximately $855 million including total indebtedness. The offer represents a 25 percent premium over the closing price of Ferro common stock on March 1, 2013, and a 32 percent premium over the volume-weighted average trading price over the preceding 60-day period.

The Company said its proposed offer price of $6.50 per share includes an immediate cash payment of $3.25 for each Ferro share outstanding and $3.25 worth of A. Schulman common stock. When cost savings and synergies are fully implemented, A. Schulman estimates annual savings of $35 million over and above the previously announced Ferro targets. Based on these additional savings, A. Schulman believes that its offer presents the opportunity for significant future value to Ferro shareholders through the equity portion of the consideration. A. Schulman stated that its offer was based upon publicly available information about Ferro, which reported sales of approximately $1.2 billion through the first nine months of its fiscal year ended December 31, 2012. However, with greater visibility into Ferro's businesses, A. Schulman expects its offer could be adjusted subject to customary due diligence.

A. Schulman expressed its "strong intent" in pursuing the combination in a letter to Ferro on February 13, 2013. Ferro's Board rejected A. Schulman's offer and expressed their belief that the company should remain independent. A. Schulman first contacted Ferro in November 2012.

"A. Schulman and Ferro are both recognized leaders in specialty chemicals with value-added product lines, similar business models, complementary competencies, markets and applications," said Joseph M. Gingo, Chairman, President and Chief Executive Officer of A. Schulman. "We believe our combination will deliver superior value to our respective shareholders and offer better value to customers, and we would welcome the opportunity to engage in a mutually beneficial dialogue with Ferro's Board and management."

Gingo added, "A. Schulman has demonstrated a proven ability to execute reorganization, growth and acquisitions. Ferro's business units align with A. Schulman's core competencies with the exception of Pharmaceuticals, which is not strategic to us. We see substantial synergies and both geographic and market growth opportunities resulting from this compelling combination, which we would hope to be a consensual transaction."

About A. Schulman, Inc.
A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds and resins headquartered in Akron, Ohio. Since 1928, the Company has been providing innovative solutions to meet its customers' demanding requirements. The Company's customers span a wide range of markets such as packaging, mobility, building & construction, electronics & electrical, agriculture, personal care & hygiene, sports, leisure & home, custom services and others. The Company employs approximately 3,300 people and has 34 manufacturing facilities globally. A. Schulman reported net sales of $2.1 billion for the fiscal year ended August 31, 2012. Additional information about A. Schulman can be found at www.aschulman.com

About Ferro Corporation
Ferro Corporation is a leading global supplier of technology-based performance materials for manufacturers. Its materials enhance the performance of products in a variety of end markets, including building and construction, automotive, appliances, electronics, household furnishings, pharmaceuticals, and industrial products. Headquartered in Mayfield Heights, Ohio, the Company has approximately 4,950 employees globally and reported 2011 sales of $2.2 billion.

A. Schulman Agrees to Acquire a Majority of the Assets of Ferro Corporation's Specialty Plastics Business Segment

-- Acquisition to strategically expand A. Schulman's engineered plastics and masterbatch color capabilities in the U.S. and Spain
-- Company continues to strengthen position in a broad range of attractive target markets
-- A. Schulman continues to pursue its aggressive growth strategy with its ninth acquisition in past four years

A. Schulman, Inc. announced today that it has entered into an agreement to purchase a selected majority of the assets of the Specialty Plastics business segment from Ferro Corporation for $91 million in cash. The purchase agreement includes four facilities located in the United States as well as operations in Spain. Subject to the satisfaction of customary closing conditions and regulatory approvals, the transaction is anticipated to close during the fourth quarter of A. Schulman's current fiscal year ending August 31, 2014. Excluded from the transaction are Ferro's plastics business and operations in Edison, New Jersey, and Carabobo, Venezuela.

The acquisition is expected to be accretive to adjusted earnings per share and the Company anticipates achieving approximately $5.5 million in synergies within 12 to 18 months following the close of the transaction, driven primarily by sourcing activities and plant efficiency actions. The Specialty Plastics assets included in the pending transaction achieved sales of $154 million in 2013, with approximately two-thirds of these revenues generated in the United States. As a result, this acquisition is expected to deliver important geographic diversification benefits to A. Schulman.

The Specialty Plastics segment is a global supplier of custom engineered plastic compounds, colorants, and liquid coatings, primarily focused on thermoset plastic technology. The business offers a broad portfolio of proprietary products and recognized brand names serving a wide range of end markets including packaging, transportation, construction, appliances and agriculture.

"Specialty Plastics is a performance-driven, technically demanding business, and this business segment is what initially attracted us to seek to acquire Ferro back in 2013. Strategically combining the two businesses provides the existing customers of the Specialty Plastics segment with an expanded product portfolio, technical solutions and global resources with the full support of the A. Schulman team. We are delighted to have reached an agreement to purchase these assets, and we plan to leverage their capabilities, competitive advantages and footprint to become an integral part of our growth engine," said Joseph M. Gingo, Chairman, President and Chief Executive Officer of A. Schulman. "When finalized, this will be the ninth acquisition we have successfully completed over the past four years, in addition to three joint ventures, as we continue to execute our aggressive growth strategy driven by organic growth and acquisitions. As we stated at our recent investor day, our goal is to gain $100 million in sales annually through acquisitions. While this large bolt-on acquisition exceeds that target, it more importantly is an excellent strategic fit with A. Schulman and provides us with an expanded geographic reach not only in the United States but also in Spain. Through our successful execution of our dual approach strategy, we are improving our position in target markets, diversifying our product mix and increasing our prospects for sustainable and profitable growth."

Bernard Rzepka, Executive Vice President and Chief Operating Officer of A. Schulman, said, "We continue to strengthen our U.S. operations and expand our global capabilities in engineered plastics, masterbatch solutions and custom performance colors, which represent outstanding profitable growth opportunities and are integral to our value creation strategy. We are impressed with the highly talented Specialty Plastics team, and we expect its demonstrated focus on customer satisfaction, innovation and technological expertise to complement our performance-oriented growth culture. The team has an impressive track record of developing high-quality specialty compounds, colors and coatings that exceed the needs of its diverse customer base."

The Specialty Plastics segment's products include color additives and concentrates with a focus on high-margin color, combination and additive masterbatches; filled and reinforced plastics with a strong position in glass-filled polypropylene and custom formulating capabilities; advanced polymer compounds and alloys including melt-processable rubber, molding and extrusion materials, and custom compounds. Its facilities are strategically located to competitively and efficiently serve its target markets and customers, with available capacity for growth in all segments.