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Filed by M.A. Hanna Company and The Geon Company
Pursuant to Rule 425 under the Securities Act of 1933
and Deemed Filed Pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Companies: M.A. Hanna Company (Commission File
No. 1-5222) and The Geon Company (Commission File No.
1-11804)
The following is a joint press release issued by
M.A. Hanna Company and The Geon Company on May 8, 2000:
M.A. HANNA AND GEON AGREE TO CONSOLIDATE,
FORMING WORLD'S LARGEST POLYMER SERVICES COMPANY
- COMBINATION PROVIDES COMPLEMENTARY STRENGTHS IN CUSTOMER FOCUS, OPERATIONS,
POLYMER COMPOUNDING, INFORMATION TECHNOLOGY, GLOBAL REACH
- $3.5 BILLION COMPANY TO HAVE NEW NAME, KEEP HEADQUARTERS IN CLEVELAND AREA
- PHILLIP ASHKETTLE TO BE CHAIRMAN AND CEO, THOMAS WALTERMIRE PRESIDENT AND
COO
- TRANSACTION WILL BE STOCK-FOR-STOCK, NON-CASH EXCHANGE
- COMPANIES COMMIT TO AT LEAST $50 MILLION IN ANNUAL OPERATING EARNINGS
IMPROVEMENT BY 2002
CLEVELAND - May 8, 2000 - The Geon Company (NYSE: GON) and The M.A. Hanna
Company (NYSE: MAH) announced today that they will join forces to create the
world's largest polymer services company. The two companies intend to
consolidate their global operations into a new organization, demonstrating
leadership in consolidating the specialty chemical industry.
The new company will have initial annual revenues of approximately $3.5 billion,
with anticipated market capitalization well above $1 billion. Closing is
anticipated in August. It is expected that shares of the new company will be
listed on the New York Stock Exchange. The consolidation is subject to approval
by shareholders of both companies and regulatory approvals.
The combination brings together two companies with complementary strengths and
common strategies to become a world leader in performance polymers and services
- - linking Geon's operating strengths with M.A. Hanna's experience in
multi-polymer compounding, colorants and distribution. The new company's strong
balance sheet will allow it to pursue an aggressive acquisition strategy.
Under a definitive consolidation agreement approved by the companies' boards of
directors at special meetings yesterday:
- Phillip D. Ashkettle, 54, will be chairman and chief executive officer of
the combined company, and Thomas A. Waltermire, 50, will be president and
chief operating officer. Under a transition plan, Waltermire will become
CEO on January 1, 2002, and chairman at the 2004 annual shareholder
meeting.
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- The consolidation will take place in the form of a cashless stock swap.
- The companies have agreed on fundamental strategies and are committed to
achieving at least $50 million in operating earnings improvement annually
from raw materials savings, market-related opportunities and overhead
reductions by 2002.
- The corporate headquarters will be consolidated at a new site in Greater
Cleveland that is yet to be determined. The new company will have more than
10,000 employees, 80 manufacturing sites and an extensive distribution
network worldwide.
- The new organization will begin immediately to develop a new name.
"The strengths of our existing companies complement one another remarkably well,
especially in major markets served," said Ashkettle, currently chairman,
president and chief executive officer of M.A. Hanna. "We were attracted to
Geon's strengths in vinyl materials, operations, information technology and
e-commerce. Together we can go to market with a breadth of technologies and
services that is second to none, creating the leadership position in every area
in which we operate."
Waltermire, now Geon's chairman and chief executive officer, added, "M.A. Hanna
brings just what Geon needs to grow - size, multi-polymer based products, and
strong international presence. In addition, we share similar business
philosophies in key areas, such as customer-focused teams, value-added selling
and aggressive growth. We believe the combination of our two strong
organizations creates an outstanding opportunity for our customers, employees,
suppliers and shareholders."
Ashkettle will have principal responsibility for corporate direction, external
relations and mergers and acquisitions. Waltermire will be responsible for
operations, organic growth, most corporate staff functions and e-business
strategies.
"Acquisitions remain a key element of our strategy," said Ashkettle. "In this
consolidating industry, there are a lot of opportunities to add value for
customers and shareholders of the combined company. We will be in a much
stronger position as the consolidator of choice to expand our business portfolio
and strengthen our global presence."
Waltermire added, "This combination enhances our ability to create a world-class
polymer services business focused on growth with solid margins and made up of a
network of closely aligned business teams. We believe the new company will bring
an unmatched capability to help our customers become more profitable. By
combining both Hanna's and Geon's developing e-commerce capabilities as well as
creating customer-focused teams, we will make already good customer service even
better."
The new board of directors will consist of 10 external members selected equally
from the current boards in addition to Ashkettle and Waltermire. Current member
of Geon's board joining the new company board are: James K. Baker, Gale
Duff-Bloom, J. Douglas Campbell, D. Larry
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Moore, and Farah M. Walters. Joining from the M.A. Hanna board will be Wayne R.
Embry, Robert A. Garda, Gordon D. Harnett, David H. Hoag and Marvin L. Mann.
Under the arrangement, M.A. Hanna and Geon will consolidate into a new Ohio
corporation. Shareholders of M.A. Hanna will receive one share of the new
corporation for each share they own at the time of closing. Shareholders of Geon
will receive two shares of the new corporation for each share they own at the
time of closing. Following the consolidation, current M.A. Hanna shareholders
will hold approximately 50 percent and Geon shareholders approximately 50
percent of the new corporation. The resulting corporation will be incorporated
in Ohio to reflect the strong Ohio presence of the combined companies.
Salomon Smith Barney Inc. is representing M.A. Hanna as investment banking
advisers, and McDonald Investments, A KeyCorp Company, is representing Geon.
M.A. Hanna Company, headquartered in Cleveland, is a $2.3 billion international
specialty polymers company focused on the plastics and rubber industries through
its operations in North America, Europe and Asia. Its primary businesses are
plastics compounding and color and additive systems, rubber compounding and
color and additives, and distribution of plastic resins and engineered plastic
shapes. Information on the company's products and services, as well as investor
presentations and details of its financial performance, is available at
http://www.mahanna.com.
The Geon Company is a leading North American-based polymer services and
technology company with operations in vinyl compounds, specialty vinyl resins
and formulations, engineered films, and other value-added products and services.
Headquartered in Avon Lake, Ohio, The Geon Company and its subsidiaries employ
more than 3,200 people and have 30 manufacturing plants in the United States,
Canada, England and Australia, and joint ventures in the United States, Canada,
England, Australia, Singapore and Colombia. Information on the Company's
products and services, as well as news releases, EDGAR filings, Form 10-K, 10-Q,
etc. is available on the Internet at http://www.geon.com.
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This release contains statements concerning trends and other forward-looking
information affecting or relating to Geon and M.A. Hanna and their respective
industry that are intended to qualify for the protections afforded
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. In particular, statements regarding the proposed transaction described
in this release are based on management's current expectations or beliefs and
are subject to a number of factors and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. The following factors, among others, could cause actual results to
differ materially from those described in the forward-looking statements: (1)
the risk that the M.A. Hanna and Geon businesses will not be integrated
successfully; (2) inability to achieve or delays in achieving savings related to
business consolidation and restructuring programs; (3) unanticipated delays in
achieving or inability to achieve cost reduction and employee productivity
goals; (4) costs related to the proposed transaction; (5) inability to obtain,
or meet conditions imposed for, governmental approvals for the merger; (6)
fluctuations in raw material prices and supply, in particular fluctuations
outside
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the normal range of industry cycles; (7) failure of the Geon or Hanna
stockholders to approve the proposed transaction; (8) unanticipated costs or
difficulties in the operation of Oxy Vinyls LP.
In connection with the business combination transaction, Geon and M.A. Hanna
expect to file a joint proxy statement/prospectus and other documents with the
Securities and Exchange Commission. Geon and M.A. Hanna expect to send the joint
proxy statement/prospectus to their respective stockholders seeking their
approval of the proposed business combination transaction. We urge investors and
stockholders to read the joint proxy statement/prospectus carefully when it is
available. The joint proxy statement/prospectus will contain important
information about the resulting company, Geon, M.A. Hanna, the proposed business
combination transaction, and related matters. Investors and stockholders will be
able to obtain free copies of the joint proxy statement/prospectus and these
documents, once available, as well as other filings made by Geon and M.A. Hanna
with the Commission through the website maintained by the Commission at
http://www.sec.gov. Free copies of the joint proxy statement/prospectus and
these other documents, once available, may also be obtained by Geon stockholders
by directing a request to Geon at One Geon Center, Avon Lake, Ohio 44012
Attention: Corporate Secretary, and by M.A. Hanna stockholders by directing a
request to M.A. Hanna at Suite 36-5000, 200 Public Square, Cleveland, Ohio 44114
- -2304, Attention: Corporate Secretary.
M.A. Hanna, its directors, executive officers and certain other members of
management and employees may be soliciting proxies from M.A. Hanna stockholders
in favor of the consolidation. Information concerning the participants in the
solicitation is set forth in the Current Report on Form 8-K filed by M.A. Hanna
with the SEC on May 8, 2000.
Geon, its directors, executive officers and certain other members of management
and employees may be soliciting proxies from Geon stockholders in favor of the
consolidation. Information concerning the participants in the solicitation is
set forth in the Current Report on Form 8-K filed by Geon with the SEC on May 8,
2000.
Investor & Media Contacts: Dennis Cocco
Vice President, Corporate & Investor Affairs
The Geon Company
(440) 930-1538
Christopher Farage
Director, Investor Relations
The M.A. Hanna Company
(216) 589-4085
