Nalco’s Merger Agreement with Ecolab

On July 20, 2011, Nalco Holding Company, a global leader in providing essential expertise for water, energy and air, announced that it has entered into a definitive merger agreement with Ecolab, Inc., a global leader in cleaning, sanitizing, food safety and infection prevention products and services. Cravath represented Nalco in connection with this transaction.

Under the terms of the agreement, Nalco shareholders may elect to receive either 0.7005 shares of Ecolab common stock per share of Nalco common stock or $38.80 in cash, without interest, per share of Nalco common stock. The overall mix of consideration paid to Nalco stockholders will be approximately 30% cash and 70% stock. Based on the closing price of Ecolab common stock on July 19, 2011, the aggregate consideration paid on a fully-diluted basis is $38.80 per Nalco share, or $5.4 billion. In the aggregate, Ecolab will issue approximately 68.9 million shares of its stock and pay approximately $1.6 billion in cash. Ecolab will also assume Nalco’s outstanding debt, which was $2.7 billion as of July 19, 2011, resulting in a total transaction value of $8.1 billion. The merger agreement, which was unanimously approved by the Boards of Directors of both companies, is subject to customary regulatory and shareholder approvals and is expected to close in the fourth quarter of 2011.

The Cravath team included partner George F. Schoen and associates Kimberly Lacee Bass, Michael E. Mariani, Gregory J. Ligelis, Jr., Brendan R. Mahan, Kenneth S. Gerold, Dong (Andy) S. Ham, Benjamin S. Persina and Juliana Han on M&A matters; partner Eric W. Hilfers, practice area attorney Michael Krasnovsky and associate Kevin E. Manz on executive compensation and benefits matters; partner Michael L. Schler on tax matters; partner Peter T. Barbur and practice area attorney Thomas C. Viles on antitrust matters; and practice area attorney Matthew Morreale on environmental matters. Summer associate Jared B. Taylor also worked on M&A matters.