Crompton Corporation And Great Lakes Chemical Corporation Announce Merger To Create Major New Specialty Chemicals Company

Crompton Corporation And Great Lakes Chemical Corporation
Announce Merger To Create Major New Specialty Chemicals Company
- Stock-for-Stock Transaction Valued at $1.8 Billion -






MIDDLEBURY, Conn. and INDIANAPOLIS, March 9  /PRNewswire-FirstCall/ -- Crompton
Corporation (NYSE:CK) and Great Lakes Chemical Corporation (NYSE:GLK) announced
today that they have entered into a definitive merger agreement for an
all-stock merger transaction, which will create the third- largest publicly
traded U.S. specialty chemicals company.  The new company will have combined
pro forma 2004 revenues of more than $4.1 billion and a market capitalization
of nearly $3.2 billion.   It will hold leading positions in high-value
specialty chemical niche businesses including plastics additives, petroleum
additives, flame retardants and pool chemicals. Additionally, the combined
company will maintain strong positions in castable urethanes and crop
protection chemicals.

Under terms of the agreement, which has been unanimously supported by the
boards of directors of both companies, Great Lakes shareholders will receive
2.2232 shares of Crompton common stock for each share of Great Lakes common
stock they hold.  The transaction is expected to be tax-free to Great Lakes'
shareholders.  The exchange ratio represents a 10.1% premium over Great Lakes'
closing share price on March 8, 2005, and equates to $29.92 per Great Lakes
share.  Based on the March 8th price, the transaction is valued at $1.8
billion, including approximately $250 million of Great Lakes net debt and
minority interest.

The new company will be owned 51 percent by Crompton shareholders and 49
percent by Great Lakes shareholders on a fully diluted basis.  Robert L. Wood,
currently chairman, president and CEO of Crompton, will serve in those
capacities for the combined company, which will be headquartered in Middlebury,
Connecticut.  In addition to Robert L. Wood, the board of directors will have
five directors from each side, for a total of eleven directors.   The new
company expects to maintain Crompton's existing cash dividend level of $.05 per
quarter.

"This combination represents an excellent strategic fit between two companies
with complementary business portfolios and will create a company with a strong
financial profile," said Robert L. Wood, chairman, president and CEO of
Crompton.  "It takes us a long way towards our goal of holding leading global
positions in true value-added specialty chemicals businesses.  In addition to
significant operating synergies, we immediately gain greater geographic reach
in plastics additives.  Building on the increasing profitability of both
companies, we see an opportunity with these solid platforms to accelerate our
momentum in delivering higher earnings and stronger cash flow.

"Leveraging our recent experience at Crompton, we will execute a well planned,
disciplined and comprehensive integration program and expect recurring annual
cost savings of $90 million - $100 million, to be achieved in most part by
2006.  The combined company will be well capitalized, and will have sufficient
liquidity to execute on its business plan," said Wood.

"We believe this merger provides immediate value creation for our shareholders
through the upfront premium and significant synergy opportunities to be
realized over the next 18 months," said John J. Gallagher, III, acting CEO of
Great Lakes.  "Further, by combining with Crompton, we create a leading global
specialty chemicals company with a portfolio of businesses capable of
delivering long-term shareholder value.  This transaction will result in a
company that is stronger and better positioned.  The combination creates
options and flexibility that operating as two separate companies would not
provide."

The transaction is expected to be accretive to the combined company's 2006
earnings per share and cash flow per share.  In addition to significant cost
synergies, the combined company expects to realize cash flow benefits related
to utilization of Crompton's net operating losses.  One-time pre-tax closing
costs are expected to be approximately $35 million - $40 million.  The combined
company also expects to incur one-time pre-tax integration costs of
approximately $90 million - $100 million.

In addition to Robert L. Wood as chairman and CEO, Karen Osar will serve as
CFO, Robert Weiner will head Supply Chain Operations, and Gregory McDaniel,
Crompton's senior vice president, Strategy and New Business Development, will
lead the integration activities.  Myles Odaniell will head the combined
company's Specialty Chemicals segment, Marcus Meadows-Smith will head Crop
Protection and Great Lakes' Kevin Dunn will head Consumer Products for the
combined company.  Other management positions will be filled through the
integration process, utilizing personnel from both companies.

The transaction, which is expected to close by mid-year, is subject to
regulatory approvals, approval by shareholders of both companies and other
customary conditions.  Morgan Stanley and Citigroup Global Markets Inc. acted
as financial advisors to Crompton on this transaction and Merrill Lynch & Co.
acted as financial advisor to Great Lakes.

In 2004, Crompton had total revenue of approximately $2.55 billion and a net
loss of $34.6 million.  Great Lakes had total revenue of $1.6 billion and net
income of $62.9 million in the same period.  At December 31, 2004, Crompton and
Great Lakes had 4,800 and 3,700 employees, respectively.

Conference Call Scheduled Today to Discuss Transaction

The parties will hold a joint conference call at 8:30 a.m. Eastern time on
Wednesday, March 9.  To access the call, dial [phone].  Live audio and
informational slides are available on Crompton's and Great Lakes' investor
relations pages at http://www.cromptoncorp.com/ and http://www.greatlakes.com/.
Replay of the conference call will be available for two weeks beginning at
12:00 p.m., Wednesday, March 9, by calling [phone], access code 773990.

About Crompton

Crompton Corporation, with annual sales of $2.55 billion, is a producer and
marketer of specialty chemicals and polymer products and equipment. Additional
information concerning Crompton Corporation is available at
http://www.cromptoncorp.com/ .

About Great Lakes

Great Lakes Chemical Corporation is the world's leading producer of certain
specialty chemicals for such applications as water treatment, household
cleaners, flame retardants, polymer stabilizers, fire suppressants, and
performance products. The stock of the company is traded on the New York Stock
Exchange.

NOTE TO INVESTORS

CROMPTON and GREAT LAKES will file a proxy statement/prospectus and other
documents regarding the proposed merger described in this communication with
the Securities and Exchange Commission.  Investors and security holders are
urged to read the proxy statement/prospectus when it becomes available, because
it will contain important information about CROMPTON and GREAT LAKES and the
proposed transaction.  A definitive proxy statement/prospectus will be sent to
security holders of CROMPTON and GREAT LAKES seeking their approval of the
transaction.  Investors and security holders may obtain a free copy of the
definitive proxy statement/prospectus (when available) and other documents
filed by CROMPTON and GREAT LAKES with the SEC at the SEC's web site at
http://www.sec.gov/.  The definitive proxy statement/prospectus and other
relevant documents may also be obtained free of cost by directing a request to
CROMPTON, 199 Benson Road, Middlebury, CT  06749, attention Investor Relations,
Telephone:  [phone] or GREAT LAKES, 9025 North River Road, Suite 400,
Indianapolis, IN  46240, attention Investor Relations, Telephone: (317)
715-3027.

CROMPTON and GREAT LAKES and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies from the
shareholders of CROMPTON and GREAT LAKES in connection with the merger.
Information about CROMPTON and GREAT LAKES and their respective directors and
officers can be found in CROMPTON's and GREAT LAKES's respective Proxy
Statements and Annual Reports on Form 10-K filed with the SEC.  Additional
information regarding the interests of those persons may be obtained by reading
the proxy statement/prospectus when it becomes available.

Forward-Looking Statements

Crompton and Great Lakes caution readers that any forward-looking information
is not a guarantee of future performance and that actual results could differ
materially from those contained in the forward-looking information.  Such
forward-looking information includes, but is not limited to, statements about
the benefits of the business combination of Crompton and Great Lakes, including
future financial and operating results, the combined companies' plans,
objectives, expectations and intentions and other statements that are not
historical facts.  The following factors, among others, could cause actual
results to differ from those included in the forward-looking information:  the
risk that the businesses will not be integrated successfully; the risk that the
cost savings and other synergies from the transaction may not be fully realized
or take longer to realize than anticipated; the inability to achieve cash flow
synergies; disruption from the transaction that makes it more difficult to
maintain relationships with employees, customers or suppliers; competition and
its effect on pricing, spending, third-party relationships and revenues; the
ability to obtain regulatory approval of the transaction on the proposed terms
and schedule; and the failure of the stockholders of either Crompton or Great
Lakes to approve the transaction. 

DATASOURCE: Great Lakes Chemical Corporation



CONTACT:  Investors: William Kuser, [phone], Media: Mary Ann

Dunnell, [phone], both of Crompton; Investors: Paul Britton,

[phone], Media: Wendy Chance, [phone], both of Great Lakes

Chemical Corporation



Web site:  http://www.greatlakes.com/

http://www.cromptoncorp.com/

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