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Item 1.01
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Entry Into a Material Definitive Agreement
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On May 6, 2016, Air Products and
Chemicals, Inc. (“Air Products”) entered into a Purchase Agreement (the “Purchase Agreement”) with Evonik Industries AG (“Evonik”). Subject to the terms and conditions of the Purchase Agreement, Evonik has agreed
to purchase certain subsidiaries and assets comprising the Performance Materials division of Air Products’ Materials Technologies segment (the “PMD Business”) for $3.8 billion in cash and the assumption of certain liabilities of the
PMD Business (the “Transaction”). The purchase price is subject to certain adjustments pursuant to the Purchase Agreement.
The Purchase Agreement contains various representations, warranties and covenants by each party, including, among others, covenants with
respect to the conduct of the PMD Business by Air Products during the period between the execution of the Purchase Agreement and the completion of the Transaction (the “Closing”). In addition, for a two-year period following the Closing,
subject to certain exceptions, Air Products and its controlled affiliates will not engage in certain activities that compete with the PMD Business. Further, for an eighteen-month period following the Closing, Air Products and its controlled
affiliates will be subject to certain non-solicitation and non-hire provisions relating to the PMD Business.
The Transaction is subject
to certain closing conditions including, among others, (1) the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of required clearances
from certain other governmental antitrust authorities, (2) the absence of any statute, rule, regulation, executive order, decree, preliminary or permanent injunction or restraining order prohibiting or restricting the consummation of the
Transaction, (3) the completion of certain IT separation activities and (4) in the case of Evonik’s obligation to close, the receipt by Air Products of certain third-party approvals. Each party’s obligation to consummate the
Transaction is also subject to (1) the accuracy of the other party’s representations and warranties contained in the Purchase Agreement (subject to certain materiality qualifiers) and (2) the other party’s performance and
compliance in all material respects with its obligations and covenants under the Purchase Agreement.
Air Products and Evonik have agreed
to use their respective reasonable best efforts to cause the Transaction to be consummated. In furtherance of this obligation, Evonik has agreed to take certain actions to obtain the required antitrust approvals and remove any impediments to
consummating the Transaction.
Either party has the right to terminate the Purchase Agreement under certain circumstances. Those
circumstances include, but are not limited to, (1) material breach by either party that has not been cured, if curable, within 30 days after notice, (2) mutual consent, (3) failure to consummate the Transaction by May 6, 2017
(the “Outside Date”), which Outside Date is subject to extension by either party for an additional three months if all conditions except for the receipt of antitrust approvals are satisfied, or (4) on account of action by a
governmental authority that restrains, enjoins or otherwise prohibits any material portion of the transactions contemplated by the Purchase Agreement.
Evonik is required to pay Air Products a termination fee of $190 million if the Purchase Agreement is terminated (1) by either party as a
result of any antitrust-related final, nonappealable order or injunction prohibiting the closing; (2) by Air Products as a result of material breach by Evonik of its
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antitrust-related covenants such that the antitrust-related condition is incapable of being satisfied; or (3) by either party as a result of the closing failing to occur on or before the
Outside Date, as it may be extended, if such delay is due to an injunction with respect to a regulatory law or failure to obtain the required antitrust approvals.
Each of Air Products and Evonik has agreed to indemnify the other party for losses arising from certain breaches of the Purchase Agreement and
for certain other liabilities, subject to certain limitations. Further, Air Products has agreed to indemnify Evonik for certain environmental liabilities related to the PMD Business, subject to certain limitations. In connection with the
Transaction, Air Products and Evonik (or entities that it will acquire in the Transaction) also will enter into certain additional ancillary agreements including, among others, a transition services agreement, leases and other agreements with
respect to sites that will be owned by Air Products and leased to Evonik following the Transaction, and certain other commercial agreements.
A copy of the Purchase Agreement is attached as Exhibit 2.1 hereto and incorporated herein by reference. The foregoing summary of the
Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement.
The representations, warranties and covenants set forth in the Purchase Agreement have been made only for the purposes of the Purchase
Agreement and solely for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between
the parties to the Purchase Agreement instead of establishing these matters as facts. In addition, such representations and warranties were made only as of the dates specified in the Purchase Agreement and information regarding the subject matter
thereof may change after the date of the Purchase Agreement. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding its terms and not to provide investors with any other factual
information regarding Air Products or its business as of the date of the Purchase Agreement or as of any other date.