Specialty chemical company Lubrizol Corp. (LZ) said Thursday that its shareholders have approved the company's acquisition by billionaire investor Warren Buffett's Berkshire Hathaway Inc. (BRKa, BRKb) for $135 per share in cash.
Lubrizol said that at a special meeting earlier on Thursday, about 95 percent of the votes cast by its shareholders voted in favor of the merger. In total, 49.4 million, or 77 percent of the company's shares outstanding as of the April 27, 2011 record date, were represented at the special meeting, constituting a quorum.
James Hambrick, chairman, president and chief executive officer of Lubrizol said, "With this approval, we are one step closer to becoming a wholly owned subsidiary of Berkshire Hathaway. I am excited about the future of Lubrizol. The acquisition leaves us well positioned to continue executing our growth agenda which includes geographic expansion, product innovation, investment in infrastructure and complementary acquisitions."
The transaction, subject to satisfaction of customary closing conditions, is expected to close in the third quarter of 2011. After the close of the transaction, Lubrizol will remain headquartered in Wickliffe, Ohio, and will continue to be led by its current CEO, James Hambrick.
Berkshire Hathaway announced a definitive deal on March 14 to acquire Lubrizol for $135 per share or for a total value of about $9.7 billion, including $0.7 billion in net debt. The deal marks one of the largest acquisitions in the history of Berkshire Hathaway.
However, the deal was mired in controversy when just two weeks after its announcement, David Sokol, a top executive of Berkshire Hathaway and who was seen as a strong contender to succeed Buffett, resigned unexpectedly.
Sokol, who had been serving as chairman of Berkshire Hathaway's MidAmerican Energy, NetJets and Johns Manville units, had bought shares of Lubrizol shortly before he recommended the company as a takeover target to Buffett.
In late April, Berkshire Hathaway's audit committee released its report to the company's board of directors regarding the trading in Lubrizol shares by Sokol, saying that Sokol's purchases of Lubrizol shares while serving as a representative of the company violated company policies.
The report stated that Sokol's misleadingly incomplete disclosures to Berkshire's senior management concerning those purchases violated the duty of candor he owed the company. Berkshire Hathaway had said it was considering possible legal action against Sokol.
In Thursday's regular trading, LZ is trading at $134.46, up $0.15 or 0.11 percent on a volume of 0.12 million shares.
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