8-KOther EventsExhibits & Filings

ECOLAB INC. 8-K Report, Corporate Update (Dec 21, 2012)

Filed December 21, 2012For Securities:ECL

Summary

Ecolab Inc. (ECL) filed an 8-K on December 21, 2012, to update investors on the ongoing acquisition of Champion Technologies. The company announced that discussions with the U.S. Department of Justice (DOJ) regarding antitrust review under the Hart-Scott-Rodino (HSR) Act are active. A timing agreement has been entered with the DOJ, extending the review waiting period until February 28, 2013. Consequently, Ecolab now anticipates the merger will not close in 2012. This delay introduces a potential financial contingency for Ecolab. If the merger closes after December 31, 2012, Ecolab may be required to pay Champion's stockholders an additional amount of up to $100 million. This payment would be equal to 50% of the incremental federal tax on the merger consideration, resulting from potential increases in capital gains and investment taxes after the end of 2012. The transaction remains subject to various closing conditions, including HSR Act clearance.

Key Highlights

  • 1Ecolab is in active discussions with the DOJ regarding antitrust review of the Champion Technologies acquisition.
  • 2The HSR Act waiting period has been extended to February 28, 2013, through a timing agreement with the DOJ.
  • 3The acquisition of Champion Technologies is now expected to close after December 31, 2012.
  • 4A potential contingent payment of up to $100 million may be due to Champion stockholders if the merger closes after 2012.
  • 5This contingent payment is tied to the incremental federal tax on the merger consideration due to potential post-2012 tax rate increases.
  • 6The transaction's closing is still subject to other standard closing conditions, including HSR Act clearance.

Frequently Asked Questions

This filing updates investors on the status of Ecolab's proposed acquisition of Champion Technologies. Specifically, it addresses the ongoing antitrust review by the U.S. Department of Justice (DOJ) and the resulting delay in the expected closing date of the merger.

The delay is due to the ongoing review process by the DOJ under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). Ecolab and Champion have entered into a timing agreement with the DOJ, extending the review period until February 28, 2013, which pushes the anticipated closing beyond December 31, 2012.

If the merger closes after December 31, 2012, Ecolab may be required to pay an additional amount of up to $100 million in cash to Champion's stockholders. This payment would represent 50% of the incremental federal tax on the merger consideration due to potential increases in capital gains and investment taxes effective after 2012.

Yes, besides clearance under the HSR Act, the merger remains subject to various other closing conditions as previously agreed upon.