Cabot Taking Control of NHUMO in Mexico

Before you go, we thought you'd like these...
Before you go close icon

Boston-based Cabot is getting bigger in Mexico.

On Monday, the specialty chemical company announced that it has agreed to buy out its Mexican joint venture partner, Grupo Kuo. Paying $80 million upfront, and $105 million in total, Cabot will acquire Kuo's 60% interest in the companies' NHUMO carbon black JV, taking full control of the venture.

Carbon black, more commonly known as "lamp black," is an amorphous carbon compound residue left behind from the incomplete combustion of heavy petroleum products. Its primary use is as a reinforcing filler ingredient in tires and other rubber products. In Mexico, NHUMO is the leading producer of the product, as Cabot is the leading producer of carbon black worldwide.


Announcing the deal, Cabot CEO Patrick Prevost noted that taking control of NHUMO "not only increases Cabot's footprint in North America, but solidifies our global leadership position in the carbon black industry."

Cabot further noted that the deal will add $0.15 per share to its fiscal 2014 earnings, exclusive of one-time costs. Further earnings gains on the order of $0.05 to $0.10 per share are expected to arrive "within the next two to three years."

The article Cabot Taking Control of NHUMO in Mexico originally appeared on Fool.com.

Fool contributor Rich Smith and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

12 Facts That Will Make You Smarter Than Your Friends 12 Facts That Will Make You Smarter Than Your Friends
Nature Gets Revenge On Safari Hunter Who Killed Elephants And Lions For Sport Nature Gets Revenge On Safari Hunter Who Killed Elephants And Lions For Sport
Man Is Horrified To Learn His Biological Father's Identity - But A Look In The Mirror Man Is Horrified To Learn His Biological Father's Identity - But A Look In The Mirror