NEWS OF THE WEEK
MOMENTIVE AND HEXION TO MERGE SPECIALTY CHEMICALS: Combined
firm will be second largest in U.S. with $7.5 billion in sales
MO MEN T IVE
Momentive researchers test silicones for keeping bathroom mirrors condensation-free.
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RIVATE EQUITY FIRM Apollo Management said
last week it will merge Hexion Specialty Chemicals and Momentive Performance Materials, both companies it controls, into a single specialty chemicals and materials maker. The combined firm, which will take the Momentive name, will have annual sales of about $7.5 billion. Hexion, the larger of the two firms, is a leading supplier of thermosetting resins for binding, bonding, and coating. Apollo created the company in 2005 from its earlier acquisitions of Borden Chemical, Resolution Performance Products, and Resolution Specialty Materials. Hexion has continued to grow by buying Bakelite and six other companies. Apollo acquired Momentive, a maker of silicones and specialty quartz, from General Electric in 2006. Prior to the purchase, Mo-
A PROFESSOR’S WORTH ACADEMIA: Report compares Texas A&M faculty members’ salaries and teaching revenues
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prepared a controversial report that details the revenue its faculty generate for the university. The report, which lists salaries, money brought in from teaching, and research grant funding, is a response to Texas taxpayers’ demands for greater accountability from the university. It has academics up in arms. A column in the document subtracts each professor’s salary from the amount he or she brings in from teaching. However, this “difference” does not include research grants, which are listed in a separate column. How the resulting numbers would be used to affect or influence the careers of academics at the TAMU System remains murky. “Our goal is not to grade our hardworking faculty but to provide the best TAMU SYSTEM
Texas A&M University, College Station, is the flagship campus of the TAMU System.
HE TEXAS A&M University (TAMU) System has
WWW.CEN-ONLINE.ORG
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mentive had been GE’s Advanced Materials division. Craig O. Morrison, CEO of Hexion, will become chairman and CEO of the combined company when the merger is complete, which Apollo expects to happen on Oct. 1. The new Momentive will have 10,000 employees and 117 manufacturing facilities around the world. The new Momentive’s $7.5 billion in sales will make it the second-largest specialty chemical firm in the U.S. after Huntsman Corp. and the 10th largest U.S. chemical company overall, according to C&EN’s latest ranking of the Top 50 U.S. chemical makers (C&EN, May 10, page 23). Executives insist that the merger is not being undertaken for cost reasons. “It’s a tremendous opportunity to build a global leader. Both firms are global in nature and together offer a broad portfolio range,” says Peter F. Loscocco, Hexion’s vice president for public affairs. The companies offer little overlap in terms of businesses, Loscocco acknowledges. Meanwhile, industry watchers will look for signs that Apollo will spin off the combined firm in an initial public offering of stock. “Although both companies are sizable enough to go public independently, there’s no doubt if you put them together you create a much larger entity, which institutional investors who want a certain weighting in the chemical sector would want to own,” observes Telly Zachariades, a partner at chemical mergers and acquisitions consultancy Valence Group.—MELODY VOITH
analytical evaluation tools we can to maximize our mission and provide the highest quality education possible,” the university notes in a statement. David H. Russell, head of the chemistry department at the university’s flagship College Station campus, is concerned that faculty could be pressured to focus on teaching, narrowly defined to emphasize classroom instruction, rather than the broader aspects of scholarship, which includes research. “This definitely could negatively impact the [reputation] of TAMU as a major research institution,” Russell tells C&EN. For example, according to the document, 32 of 45 tenured and tenure-track chemistry faculty at the College Station campus brought in less money from teaching than was paid out for their salaries during the 2008–09 school year. However, during that same period, the department brought in more than $14 million in research grants. The amount the department generated from teaching after salaries are subtracted is a bit over $5 million. William M. Gelbart, a chemistry professor at UCLA, says the amount of money professors bring in is only a small part of their actual worth. “It’s the wrong way to think,” he tells C&EN. “In the end, they should be judged by people who know the field, by their originality and productivity.” The TAMU System is the seventh-largest in the U.S., consisting of 10 colleges throughout Texas, and enrolls nearly 115,000 students.—ELIZABETH WILSON
SEPTEMBER 20, 2010
