Ecolab to buy Nalco Holding for about $5.4 billion

By the Associated Press | July 20, 2011 | 7:14 AM EDT

ST. PAUL, Minn. (AP) — Cleaning and pest-control services company Ecolab Inc. is buying the water treatment company Nalco Holding Co. for about $5.4 billion in an effort to expand its product line.

Under the deal announced Wednesday, Nalco shareholders will receive either 0.7005 shares of Ecolab stock or $38.80 per share in cash. Both companies board have approved it.

Ecolab is based in St. Paul, Minnesota, and Nalco is in Naperville, Illinois.

The cash offer is a 34 percent premium to Nalco's closing stock price on Tuesday of $28.87.

In addition to the price being paid for the shares, Ecolab will assume about $2.7 billion of Nalco debt, pushing the value of the overall transaction to about $8.1 billion.

The transaction is expected to close in the fourth quarter.