'The transaction provides immediate and certain value': Kraton optimistic about acquisition

South Korean company DL Chem has acquired the Houston-based Kraton. 

Kraton Corp., a Houston-based chemical company, is slated to be acquired by South Korean company DL Chemical Co. LTD for an estimated $2.5 billion.

“We believe the transaction provides immediate and certain value for Kraton stockholders and represents an attractive premium of approximately 50% over Kraton’s unaffected market valuation as of early July," Kraton CEO Kevin Fogarty said in a press release. "Moreover, we believe DL Chemical has the industry presence and resources to continue to support the growth of Kraton’s business on a global scale.”

Kraton is known for making a range of products, from rubber and adhesives for roads to medical equipment to hygiene products. This acquisition comes as a part of the company's plan to spend $1.7 billion on expanding internationally to expand its overseas production capacity. DL Chemical Co. LTD will be purchasing 100% of the Houston-based company in an all cash deal.

While final closure has not been reached yet, that is expected to come early 2022. Kraton's sales last year more than doubled those of DL Chem, which is one of the reasons that the announcement surprised the market. However, this is not the company's first international acquisition. They previously purchased Singapore-based Cariflex Pte in 2020 for $530 million.