SUMMARY

This summary highlights selected information from this joint proxy statement/prospectus and may not contain all of the information that is important to you. For a more detailed description of the merger and the legal terms of the merger agreement, you should carefully read this entire joint proxy statement/prospectus and the other documents to which we refer you, including in particular the copy of the merger agreement that is attached as Annex A to this joint proxy statement/prospectus and as Exhibit 2.1 to the registration statement on Form S-4, of which this joint proxy statement/prospectus forms a part, filed by Albemarle with the Securities and Exchange Commission (which we refer to in this joint proxy statement/prospectus as the SEC). See also “Where You Can Find More Information” beginning on page 148. We have included page references parenthetically to direct you to a more detailed description of the topics presented in this summary.

General

The Merger (page 41)

On July 15, 2014, Albemarle, Merger Sub and Rockwood entered into the merger agreement, which is the agreement governing the merger. On the terms and subject to the conditions set out in the merger agreement, Merger Sub, a wholly-owned subsidiary of Albemarle, will merge with and into Rockwood (which we refer to in this joint proxy statement/prospectus as the merger), with Rockwood as the surviving corporation in the merger. Following the completion of the merger, Rockwood will be a wholly-owned subsidiary of Albemarle and Rockwood common stock will no longer be publicly traded.

The Companies (page 40)

Albemarle is a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals that meet customer needs across a diverse range of end markets, including the petroleum refining, consumer electronics, plastics/packaging, construction, automotive, lubricants, pharmaceuticals, crop protection, food safety and custom chemistry services markets. Albemarle employs approximately 3,900 people and serves customers in approximately 100 countries. Albemarle was incorporated in Virginia in 1993. Albemarle’s principal executive offices are located at 451 Florida Street, Baton Rouge, Louisiana 70801, and its telephone number at that address is 225-388-8011. Albemarle’s website is www.albemarle.com.

Rockwood is a leading global developer, manufacturer and marketer of technologically advanced and high value-added specialty chemicals used for industrial and commercial purposes. Rockwood is a leading integrated and low cost global producer of lithium and lithium compounds for use in things such as lithium ion batteries for hybrid and electric vehicles and electronic devices, as well as pharmaceutical applications, among other things, and is also the second largest global producer of surface treatment products and services for metal processing, including for use in the automotive and aerospace industries. Rockwood employs approximately 3,500 people and serves customers in more than 60 countries. Rockwood was incorporated in Delaware in September 2000. Rockwood’s principal executive offices are located at 100 Overlook Center, Princeton, New Jersey 08540, and its telephone number at that address is 609-514-0300. Rockwood’s website is www.rocksp.com.

Merger Sub, a Delaware corporation and a wholly-owned subsidiary of Albemarle, was formed on July 11, 2014, solely for the purpose of effecting the merger. To date, Merger Sub has not conducted any activities other than those in connection with its formation and in connection with the transactions contemplated by the merger agreement. Merger Sub’s principal executive offices are located at 451 Florida Street, Baton Rouge, Louisiana 70801, and the telephone number at that address is 225-388-8011.

Merger Consideration to be Received by Rockwood Shareholders (page 80)

At the effective time of the merger, each share of Rockwood common stock (other than Rockwood excluded shares) will be converted into the right to receive (a) $50.65 in cash, without interest; and (b) 0.4803 of a share of Albemarle common stock.

Treatment of Rockwood Stock Options and Other Equity-Based Awards (page 95)

Each outstanding and unexercised Rockwood stock option will be converted into an option to acquire a number of shares of Albemarle common stock determined by multiplying the number of shares underlying such Rockwood stock option by the sum of (x) the exchange ratio (0.4803) plus (y) the quotient obtained by dividing the cash portion of the merger consideration ($50.65) by the volume weighted average price of a share of Albemarle common stock over the five trading

 

days prior to the merger, subject to the same terms and conditions of the Rockwood stock option as in effect prior to the merger. The applicable exercise price will also be appropriately adjusted in a manner designed to maintain the intrinsic value of the Rockwood stock option. All outstanding Rockwood stock options have fully vested and are exercisable under the terms of their respective stock option plans and award agreements.

Each outstanding performance-based restricted stock unit in respect of Rockwood common stock will, upon the effective time of the merger, be converted into the right to receive a cash payment calculated based on the achievement of performance conditions as of the effective time of the merger, which payment will vest and become payable on the payment date set out in the applicable award agreement or, if earlier, upon a qualifying termination of employment. Achievement of performance conditions under performance-based restricted stock unit awards will be determined based on the total shareholder return (in the case of performance-based restricted stock units) or stock price multiple (in the case of performance-based market stock units) based on either Rockwood’s total shareholder return compared against a specified peer group or the increase in Rockwood’s stock price, respectively, in each case, as determined at the beginning of the performance period, compared to the “CIC Per Share Price.” The “CIC Per Share Price” will equal the sum of (x) the cash portion of the merger consideration ($50.65) plus (y) the product of the exchange ratio (0.4803) and the volume weighted average price of a share of Albemarle common stock over the five trading days prior to the merger. In addition, following the merger and until the payment date, the amount payable to award recipients will accrue interest annually at LIBOR plus 2.0%.

Appraisal Rights (page 97)

Under Delaware law, holders of Rockwood common stock who do not vote in favor of adoption of the merger agreement are entitled to demand appraisal of their shares of Rockwood common stock in accordance with the applicable provisions of Delaware law, and, if such rights are properly demanded and perfected and are not withdrawn or otherwise lost and the merger is completed, such shareholders will be entitled to obtain payment of the judicially determined fair value of such shareholders’ shares of Rockwood common stock instead of receiving the merger consideration. To exercise such rights, Rockwood shareholders must strictly follow the procedures prescribed by Delaware law. The failure to strictly follow such procedures can result in the loss of such rights. It is possible that the fair value of shares of Rockwood common stock as determined by the Delaware Court of Chancery may be more or less than, or the same as, the merger consideration.

Under Virginia law, Albemarle shareholders are not entitled to appraisal rights in connection with the merger.

Material U.S. Federal Income Tax Consequences of the Merger (page 81)

The receipt of the merger consideration in exchange for Rockwood common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes and may also be taxable under state, local and non-U.S. income and other tax laws. For U.S. federal income tax purposes, if you held Rockwood common stock as a capital asset you will generally recognize capital gain or loss as a result of the merger measured by the difference, if any, between (1) the sum of (a) the amount of cash you receive in the merger including amounts, if any, withheld from the merger consideration otherwise payable to you and paid to taxing authorities by Albemarle or other applicable withholding agents and (b) the fair market value, at the effective time of the merger, of the shares of Albemarle common stock you receive in the merger and (2) the adjusted tax basis in your shares of Rockwood common stock immediately prior to the effective time of the merger. You should read “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 81 for a more complete discussion of the material U.S. federal income tax consequences of the merger. Tax matters can be complicated, and the tax consequences of the merger to you will depend on your particular tax situation. We urge you to consult your tax advisor to determine the tax consequences of the merger to you.

Recommendation of the Albemarle Board of Directors (page 51)

The Albemarle board of directors unanimously (excluding one director who recused herself) (i) approved the execution, delivery and performance of the merger agreement and the Albemarle share issuance and the other transactions contemplated by the merger agreement, (ii) declared the merger agreement and the Albemarle share issuance advisable and (iii) recommends that Albemarle shareholders vote “FOR” the Albemarle share issuance and “FOR” the Albemarle adjournment proposal.

To review the background of, and Albemarle’s reasons for, the merger, as well as certain risks related to the merger, see “The Merger—Background to the Merger” beginning on page 41, “The Merger—Albemarle’s Reasons for the Merger and Recommendation of the Albemarle Board of Directors” beginning on page 51 and “Risk Factors” beginning on page 23, respectively.

 

Recommendation of the Rockwood Board of Directors (page 54)

The Rockwood board of directors unanimously (i) approved the execution, delivery and performance of the merger agreement and the consummation of the merger and the other transactions contemplated by the merger agreement, (ii) declared the merger agreement advisable and (iii) recommends that Rockwood shareholders vote “FOR” the adoption of the merger agreement, “FOR” the Rockwood merger-related compensation proposal and “FOR” the Rockwood adjournment proposal.

To review the background of, and Rockwood’s reasons for, the merger, as well as certain risks related to the merger, see “The Merger—Background to the Merger” beginning on page 41, “The Merger—Rockwood’s Reasons for the Merger and Recommendation of the Rockwood Board of Directors” beginning on page 54 and “Risk Factors” beginning on page 23, respectively.

Opinion of Albemarle’s Financial Advisor (page 57)

In connection with the merger, Albemarle’s financial advisor, Merrill Lynch, Pierce, Fenner & Smith Incorporated (which we refer to in this joint proxy statement/prospectus as BofA Merrill Lynch), delivered to the Albemarle board of directors an oral opinion confirmed by a written opinion dated July 14, 2014, to the effect that, as of that date and based upon and subject to various assumptions and limitations described in the opinion, the merger consideration to be paid by Albemarle to the holders of shares of Rockwood common stock (other than Rockwood excluded shares) in the transaction was fair, from a financial point of view, to Albemarle. The full text of BofA Merrill Lynch’s written opinion, dated July 14, 2014, is attached as Annex B to this joint proxy statement/prospectus and is incorporated by reference herein in its entirety, and sets forth, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken by BofA Merrill Lynch in rendering its opinion.

BofA Merrill Lynch delivered its opinion to the Albemarle board of directors for the benefit and use of the Albemarle board of directors (in its capacity as such) in connection with and for purposes of its evaluation of the transaction. BofA Merrill Lynch’s opinion did not address any aspect of the transaction other than the merger consideration. BofA Merrill Lynch expressed no opinion or view as to the relative merits of the transaction in comparison to other strategies or transactions that might be available to Albemarle or in which Albemarle might engage or as to the underlying business decision of Albemarle to proceed with or effect the transaction. BofA Merrill Lynch also expressed no opinion as to what the value of the Albemarle common stock actually will be when issued or the prices at which Albemarle common stock or Rockwood common stock will trade at any time, including following announcement or consummation of the transaction. In addition, BofA Merrill Lynch expressed no opinion or recommendation as to how any shareholder should vote or act in connection with the transaction or any related matter.

For a more complete description, please see the section of this joint proxy statement/prospectus entitled “The Merger—Opinion of Albemarle’s Financial Advisor” beginning on page 57. Please also see Annex B to this joint proxy statement/prospectus.

Opinions of Rockwood’s Financial Advisors (page 63)

Each of Lazard Frères & Co. LLC (which we refer to in this joint proxy statement/prospectus as Lazard) and Citigroup Global Markets Inc. (which we refer to in this joint proxy statement/prospectus as Citi), rendered its opinion to the Rockwood board of directors that, as of July 14, 2014 and based upon and subject to the assumptions, matters considered, procedures, factors, qualifications and limitations set forth in their respective written opinions, the merger consideration to be received by holders of Rockwood common stock (other than holders of Rockwood excluded shares) was fair, from a financial point of view, to such holders.

The full text of the written opinions of Lazard and Citi, both dated July 14, 2014, which set forth the assumptions made, matters and factors considered, procedures followed and qualifications and limitations on the review undertaken in connection with each opinion, are included in this joint proxy statement/prospectus as Annex C and Annex D, respectively. Lazard and Citi provided their respective opinions for the benefit and information of the Rockwood board of directors for purposes of its evaluation of the transactions contemplated by the merger agreement. Neither Lazard’s opinion nor Citi’s opinion constitutes a recommendation to any holder of Rockwood common stock as to how any such shareholder should vote or act with respect to the merger or any matter relating thereto. In addition, neither Lazard nor Citi was requested to opine as to, and neither opinion in any manner addresses, Rockwood’s underlying business decision to proceed with or effect the merger.

 

Interests of Rockwood Directors and Executive Officers in the Merger (page 73)

In considering the recommendation of the Rockwood board of directors that Rockwood shareholders vote to adopt the merger agreement, shareholders should be aware that certain of Rockwood’s directors and executive officers have interests in the merger that differ from, or are in addition to, the interests of Rockwood shareholders generally. The members of the Rockwood board of directors were aware of these interests at the time they approved the merger. These interests are summarized below.

Employee Benefits Matters

Indemnification

Rockwood’s executive officers and directors will have the right to indemnification and advancement of expenses for events occurring prior to the time of the transaction and continued coverage under directors’ and officers’ liability insurance policies by the surviving corporation following the merger.

Annual Bonus Plans

Rockwood’s 2014 annual bonus plan, established prior to the execution of the merger agreement, will be continued. Under the terms of the merger agreement, if the merger is completed prior to December 31, 2014, bonus amounts will be calculated based on target level of performance in respect of fiscal year 2014 and the surviving corporation will pay the 2014 bonuses in the ordinary course before March 15, 2015. If the merger is completed after December 31, 2014, bonus amounts will be calculated based on actual results and performance achieved in respect of fiscal year 2014 and the surviving corporation will pay the 2014 bonuses in the ordinary course before March 15, 2015.

With respect to 2015 annual bonuses, if the merger is completed during fiscal year 2015, Rockwood will set the fiscal year targets and budget in consultation with Albemarle and the surviving corporation will pay bonuses thereunder in the ordinary course in 2016, subject to the employee’s continued employment through the payment date. Pursuant to the merger agreement, the aggregate target bonus amounts in respect of Rockwood’s 2015 annual bonus plan may not exceed 110% of the aggregate Rockwood 2014 target bonus amounts.

Employment Agreements

Rockwood maintains employment agreements with its named executive officers. If the applicable named executive officer’s employment with Rockwood terminates under certain circumstances, including in connection with a change in control, the executive will be entitled to severance benefits as set forth in the executive’s employment agreement.

Severance and Retention Arrangements

Certain of Rockwood’s executive officers and other employees have severance agreements that provide for the payment of retention and/or increased severance amounts in connection with the transactions contemplated by the merger agreement.

Treatment of Equity-Based Awards

Rockwood equity awards held by executive officers and directors of Rockwood that are outstanding immediately prior to the effective time of the merger will be subject to the following treatment upon the effective time of the merger:

Options

Outstanding and unexercised Rockwood stock options will be converted into options to acquire a number of shares of Albemarle common stock determined by multiplying the number of shares underlying each Rockwood stock option by the sum of (x) 0.4803 plus (y) the quotient obtained by dividing the cash portion of the merger consideration ($50.65) by the volume weighted average price of a share of Albemarle common stock over the five trading days prior to the merger, subject to the same terms and conditions of the Rockwood options as in effect prior to the merger. All outstanding stock options have fully vested and are exercisable under the terms of their respective stock option plans and award agreements.

Performance-Based Restricted Stock Units

Albemarle will honor the original vesting terms under all outstanding awards of performance-based restricted stock units, if the applicable participant remains employed through the original vesting dates, and the “double trigger” vesting of the awards, if the applicable participant incurs a qualifying termination of employment following the merger. In accordance

 

with the terms of the awards, at the effective time of the merger, each award of performance-based restricted stock units will be converted into the right to receive a cash payment calculated under the applicable award agreement, which payment will vest and become payable on the payment date set out in the applicable award agreement or, if earlier, upon a qualifying termination of employment.

Continuing Directors

The Albemarle board of directors has approved an amendment of Albemarle’s bylaws, to be effective as of the effective time of the merger, to increase the number of directors that constitute the Albemarle board of directors from ten to eleven. Prior to the effective time of the merger, Albemarle will secure the resignation of two members of the Albemarle board of directors effective as of the effective time of the merger. Albemarle will appoint to the Albemarle board of directors, effective as of the effective time of the merger, three individuals designated by the Rockwood board of directors. If a designee was not a member of the Rockwood board of directors as of the date of the merger agreement, such designee must be reasonably acceptable to the Nominating & Governance Committee of the Albemarle board of directors.

The Rockwood designees will serve on the Albemarle board of directors until the next annual meeting of Albemarle shareholders and will be nominated for election at such next annual meeting to serve until the next subsequent annual meeting of Albemarle shareholders and until their respective successors are duly elected and qualified.

Comparison of Shareholders’ Rights (page 134)

Rockwood shareholders, whose rights are currently governed by Rockwood’s amended and restated certificate of incorporation and fourth amended and restated bylaws and Delaware law, will, upon the completion of the merger, become shareholders of Albemarle and their rights will be governed by Albemarle’s amended and restated articles of incorporation and amended and restated bylaws and Virginia law. Some of the rights associated with Rockwood common stock are different from the rights associated with Albemarle common stock.

The Albemarle Special Meeting

The Albemarle special meeting will be held on Friday, November 14, 2014, at 8:00 a.m., local time, at Albemarle’s offices located at 451 Florida Street, Baton Rouge, Louisiana 70801. At the Albemarle special meeting, Albemarle shareholders will be asked to consider and vote upon the following proposals:

 

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approval of the Albemarle share issuance; and

 

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approval of the Albemarle adjournment proposal.

Only business that is stated in the Notice of Special Meeting of Shareholders may be conducted at the Albemarle special meeting. Any action may be taken on the items of business described above at the Albemarle special meeting on the date specified above, or on any date or dates to which, by original or later adjournment, the special meeting may be adjourned.

Record Date; Shares Entitled to Vote; Quorum (page 33)

The Albemarle board of directors has fixed the close of business on Tuesday, September 30, 2014, as the record date for the Albemarle special meeting.

Each share of Albemarle common stock is entitled to one vote.

A majority of the shares of Albemarle common stock entitled to vote, represented in person or by proxy, will constitute a quorum for the transaction of business at the Albemarle special meeting. As of the Albemarle record date, 78,248,753 shares of Albemarle common stock were outstanding and entitled to vote at the Albemarle special meeting.

Vote Required (page 33)

Approval of the Albemarle share issuance requires approval by a majority of the votes cast on the Albemarle share issuance at the Albemarle special meeting. Under NYSE rules, abstentions will have the same effect as votes “AGAINST” the Albemarle share issuance. Shares not present at the Albemarle special meeting will have no effect on the outcome of the vote on the Albemarle share issuance (assuming a quorum is present).

 

Approval of the Albemarle adjournment proposal requires that the votes cast favoring the Albemarle adjournment proposal exceed the votes cast opposing the Albemarle adjournment proposal at the Albemarle special meeting. Abstentions and shares not present at the Albemarle special meeting will have no effect on the outcome of the vote on the Albemarle adjournment proposal (whether or not a quorum is present).

Shares Owned by Albemarle Directors and Executive Officers (page 33)

As of the Albemarle record date, directors and executive officers of Albemarle beneficially owned and were entitled to vote 699,758 shares of Albemarle common stock, which represented less than 1% of the outstanding shares of Albemarle common stock entitled to vote at the Albemarle special meeting on such date. Each of the directors and executive officers of Albemarle has advised Albemarle that, as of the date hereof, he or she currently expects to vote his or her shares, or cause his or her shares to be voted, “FOR” the Albemarle share issuance and “FOR” the Albemarle adjournment proposal.

The Rockwood Special Meeting

The Rockwood special meeting will be held on Friday, November 14, 2014, at 9:00 a.m., local time, at Rockwood’s offices located at 100 Overlook Center, Princeton, New Jersey 08540. At the Rockwood special meeting, Rockwood shareholders will be asked to consider and vote upon the following proposals:

 

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adoption of the merger agreement;

 

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approval, on an advisory, non-binding basis, of the Rockwood merger-related compensation proposal; and

 

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approval of the Rockwood adjournment proposal.

Rockwood is not aware of any other business to be acted upon at the Rockwood special meeting. If, however, other matters are properly brought before the Rockwood special meeting, the persons named in the proxy card will have the discretion to vote or act on those matters according to their best judgment and they intend to vote the shares as the Rockwood board of directors may recommend.

Record Date; Shares Entitled to Vote; Quorum (page 37)

The Rockwood board of directors has fixed the close of business on Tuesday, September 30, 2014, as the record date for the Rockwood special meeting.

Each share of Rockwood common stock is entitled to one vote.

Shareholders who hold shares representing a majority of the outstanding shares of Rockwood common stock on the record date must be present in person or represented by proxy to constitute a quorum for voting on the proposal to adopt the merger agreement. Shareholders who hold shares representing a majority of the outstanding shares of Rockwood common stock entitled to vote on each other matter at the Rockwood special meeting must be present in person or represented by proxy to constitute a quorum for voting on the Rockwood merger-related compensation proposal and the Rockwood adjournment proposal at the Rockwood special meeting. As of the Rockwood record date, 71,240,507 shares of Rockwood common stock were outstanding.

Vote Required (page 38)

Adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Rockwood common stock entitled to vote thereon. Abstentions and shares not present at the Rockwood special meeting will have the same effect as votes “AGAINST” the adoption of the merger agreement.

Approval of the Rockwood merger-related compensation proposal requires the affirmative vote of holders of a majority of the shares of Rockwood common stock that are entitled to vote on the proposal and are present, in person or by proxy, at the Rockwood special meeting. Abstentions will have the same effect as votes “AGAINST” the Rockwood merger-related compensation proposal. Shares not present at the Rockwood special meeting will have no effect on the outcome of the vote on the Rockwood merger-related compensation proposal (assuming a quorum is present).

Approval of the Rockwood adjournment proposal requires the affirmative vote of holders of a majority of the shares of Rockwood common stock that are entitled to vote on the proposal and are present, in person or by proxy, at the Rockwood special meeting. Abstentions will have the same effect as votes “AGAINST” the Rockwood adjournment proposal. Shares not present at the Rockwood special meeting will have no effect on the outcome of the vote on the Rockwood adjournment proposal (whether or not a quorum is present).

 

Shares Owned by Rockwood Directors and Executive Officers (page 38)

On the Rockwood record date, directors and executive officers of Rockwood beneficially owned and were entitled to vote 1,486,352 shares of Rockwood common stock, which represented 2.1% of the outstanding shares of Rockwood common stock entitled to vote at the Rockwood special meeting on such date. Each of the directors and executive officers of Rockwood has advised Rockwood that, as of the date hereof, he or she currently expects to vote his or her shares, or cause his or her shares to be voted, “FOR” the adoption of the merger agreement, “FOR” the Rockwood merger-related compensation proposal and “FOR” the Rockwood adjournment proposal.

The Merger Agreement

The following is a summary of material provisions of the merger agreement. The following summary of the merger agreement does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. The summary of the material terms of the merger agreement below and elsewhere in this joint proxy statement/prospectus is subject to, and qualified in its entirety by, reference to the full text of the merger agreement, which is attached as Annex A to this joint proxy statement/prospectus and is incorporated herein by reference. You should read the entire merger agreement carefully and in its entirety because it, and not the description below or elsewhere in this joint proxy statement/prospectus, is the legal document that governs the merger.

Conditions to the Completion of the Merger (page 97)

Albemarle, Rockwood and Merger Sub are obligated to complete the merger subject to the satisfaction, or, to the extent permitted by applicable law, waiver, of several conditions, including the following:

 

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the adoption of the merger agreement by the holders of a majority of the outstanding shares of Rockwood common stock at the Rockwood special meeting;

 

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the approval of the Albemarle share issuance by a majority of votes cast by the holders of Albemarle common stock at the Albemarle special meeting;

 

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the shares of Albemarle common stock to be issued to Rockwood shareholders pursuant to the merger agreement and any such other shares of Albemarle common stock to be reserved for issuance in connection with the merger have been approved for listing on NYSE, subject to official notice of issuance;

 

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the absence of any law, constitution, treaty, convention, ordinance, code, rule, statute, regulation or other similar requirement, or any temporary, preliminary or permanent order, writ, injunction, decree, judgment, award, settlement or stipulation promulgated, enacted, rendered, adopted or issued by any governmental entity of competent jurisdiction that prohibits or makes illegal the completion of the merger;

 

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the effectiveness of the registration statement for the shares of Albemarle common stock being issued in the merger, the absence of any stop order suspending such effectiveness and no proceeding seeking a stop order being pending before the SEC; and

 

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the expiration or termination of the waiting period (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (which we refer to in this joint proxy statement/prospectus as the HSR Act) applicable to the merger in the United States and the grant of the decisions, orders, consents or expiration of any waiting periods required to consummate the merger under the competition laws of certain other jurisdictions agreed by the parties.

Albemarle and Merger Sub’s obligation to consummate the merger is further subject to satisfaction or waiver (by Albemarle or Merger Sub) of the following additional conditions:

 

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Rockwood’s representations and warranties being true and correct as of the date of the merger agreement and the closing date, subject to certain materiality or material adverse effect qualifications described in the merger agreement, and the receipt by Albemarle of a certificate from a senior executive officer of Rockwood to that effect; and

 

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Rockwood having performed or complied in all material respects with all obligations required to be performed or complied with by it under the merger agreement prior to the completion of the merger, and the receipt by Albemarle of a certificate from a senior executive officer of Rockwood to that effect.

 

Rockwood’s obligation to consummate the merger is further subject to satisfaction or waiver (by Rockwood) of the following additional conditions:

 

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the representations and warranties of Albemarle and Merger Sub being true and correct as of the date of the merger agreement and as of the closing date, subject to certain materiality and material adverse effect qualifications described in the merger agreement, and the receipt by Rockwood of a certificate from a senior executive officer of Albemarle to that effect; and

 

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Albemarle and Merger Sub having performed or complied in all material respects with all obligations required to be performed or complied with by each of them under the merger agreement prior to the completion of the merger, and the receipt by Rockwood of a certificate from a senior executive officer of Albemarle to that effect.

Termination of the Merger Agreement; Termination Fees (pages 101 and 102)

The merger agreement contains provisions addressing the circumstances under which Albemarle or Rockwood may terminate the merger agreement. In certain circumstances, upon termination of the merger agreement, Albemarle or Rockwood will be required to pay a termination fee of $300 million or $180 million, respectively, to the other party and/or either party may be required to reimburse the other party for its transaction-related expenses, subject to a $25 million limit. The amount of any expenses paid by either Albemarle or Rockwood to the other party will be credited against any termination fee to be paid by such party if the termination fee subsequently becomes payable.

Regulatory Matters (page 86)

Albemarle and Rockwood have agreed to use their reasonable best efforts to take, or cause to be taken, all actions that are necessary, proper or advisable to consummate the merger and the other transactions contemplated by the merger agreement as promptly as practicable, including using reasonable best efforts to obtain (and cooperating with the other party to obtain) all regulatory approvals required to complete the transactions contemplated by the merger agreement. However, neither Albemarle nor Rockwood is required to take any action that would reasonably be expected to have a material adverse effect on the business of Albemarle or Rockwood as the surviving corporation in the merger.

Under the HSR Act, and the rules promulgated thereunder by the Federal Trade Commission (which we refer to in this joint proxy statement/prospectus as the FTC), the merger may not be completed until notification and report forms have been filed with the FTC and the Antitrust Division of the Department of Justice (which we refer to in this joint proxy statement/prospectus as the DOJ) and the applicable waiting period has expired or been terminated. Albemarle and Rockwood filed notification and report forms under the HSR Act with the FTC and the Antitrust Division of the DOJ on August 8, 2014, and the waiting period expired on September 8, 2014.

Additionally, the parties agreed to make, or cause to be made, antitrust filings in the European Union, People’s Republic of China and certain other foreign jurisdictions. The parties have started the notification process with most of the relevant competition authorities. As is customary with regulatory notifications filed with the European Commission and the Ministry of Commerce of the People’s Republic of China (which we refer to in this joint proxy statement/prospectus as MOFCOM), the European Commission and MOFCOM are reviewing the parties’ notifications to determine whether they will formally accept the notifications. The European Commission has already sought, and MOFCOM will likely seek, clarifications or supplemental information from the parties before formally accepting the notifications, which is also customary. After the European Commission and MOFCOM formally accept the filings, both authorities will begin the formal review phase of the mergers. The parties do not anticipate any substantive antitrust problem to arise during the review. The parties currently estimate that they will receive European Commission clearance for the merger in the fourth quarter of 2014 and MOFCOM clearance during the first quarter of 2015.

No Solicitation of Transactions (page 99)

The merger agreement contains restrictions on each of Rockwood’s and Albemarle’s ability to solicit or engage in discussions or negotiations with a third party regarding specified transactions involving each company or their respective subsidiaries. Notwithstanding these restrictions, under certain circumstances and subject to certain conditions, each of Rockwood’s and Albemarle’s board of directors may respond to an unsolicited written acquisition proposal or, in the case of Rockwood, may terminate the merger agreement if at any time prior to the adoption of the merger agreement by the shareholders of Rockwood, the Rockwood board of directors determines to enter into a binding agreement that provides for a superior proposal for Rockwood.

 

Accounting Treatment of the Merger (page 114)

The merger will be accounted for using the acquisition method of accounting with Albemarle being considered the acquirer of Rockwood for accounting purposes.

Selected Historical Consolidated Financial Data of Albemarle

The selected historical consolidated financial data of Albemarle presented for the years ended December 31, 2013, 2012 and 2011 and as of December 31, 2013 and 2012 has been derived from Albemarle’s audited consolidated financial statements incorporated by reference into this joint proxy statement/prospectus. The selected historical consolidated financial data of Albemarle presented for each of the years ended December 31, 2010 and 2009 and as of December 31, 2011, 2010 and 2009 has been derived from Albemarle’s audited consolidated financial statements not incorporated by reference into this joint proxy statement/prospectus.

The selected historical consolidated financial data of Albemarle presented for the six months ended June 30, 2014 and 2013 and as of June 30, 2014 has been derived from Albemarle’s unaudited consolidated financial statements incorporated by reference into this joint proxy statement/prospectus and has been prepared on the same basis as Albemarle’s audited financial statements and, in Albemarle management’s opinion, includes all normal and recurring adjustments that Albemarle considers necessary for a fair presentation of Albemarle’s financial position and results of operations for such periods and as of such date.

Albemarle’s historical results are not necessarily indicative of future results of operations of Albemarle or the combined company following completion of the merger, and you should read the following information together with Albemarle’s consolidated financial statements and the related notes incorporated by reference into this joint proxy statement/prospectus, as well as other information that has been filed by Albemarle with the SEC. See “Where You Can Find More Information” beginning on page 148 for information on where you can obtain copies of this information.

 

		Year ended December 31,																				Six months ended June 30,
($ in thousands, except per share amounts)		2013				2012				2011				2010				2009				2014				2013
Results of Operations
Net sales		$	2,394,270			$	2,519,154			$	2,651,667			$	2,170,500			$	1,843,878			$	1,204,564			$	1,163,439
Costs and expenses			1,817,595				2,119,371				2,131,919				1,779,266				1,700,344				1,016,401				942,676
Operating profit			576,675				399,783				519,748				391,234				143,534				188,163				220,763
Interest and financing expenses			(31,559	)			(32,800	)			(37,574	)			(25,533	)			(24,584	)			(17,506	)			(12,839	)
Other (expenses) income, net			(6,674	)			1,229				357				2,788				(1,423	)			164				(5,779	)
Income from continuing operations before income taxes and equity in net income of unconsolidated investments			538,442				368,212				482,531				368,489				117,527				170,821				202,145
Income tax expense (benefit)			134,445				80,433				104,471				84,183				(21,364	)			34,963				45,934
Income from continuing operations before equity in net income of unconsolidated investments			403,997				287,779				378,060				284,306				138,891				135,858				156,211
Equity in net income of unconsolidated investments (net of tax)			31,729				38,067				43,754				37,975				22,322				19,550				19,970
Income from continuing operations			435,726				325,846				421,814				322,281				161,213				155,408				176,181
Income (loss) from discontinued operations (net of tax)			4,108				4,281				(1,617	)			7,136				8,812				(61,794	)			4,463
Net income			439,834				330,127				420,197				329,417				170,025				93,614				180,644
Net income attributable to noncontrolling interests			(26,663	)			(18,591	)			(28,083	)			(13,639	)			(11,255	)			(14,584	)			(13,918	)
Net income attributable to Albemarle Corporation		$	413,171			$	311,536			$	392,114			$	315,778			$	158,770			$	79,030			$	166,726
Financial Position and Other Data
Total assets		$	3,584,797			$	3,437,291			$	3,203,824			$	3,068,081			$	2,771,557			$	3,454,532			$	3,335,949
Operations:
Working capital		$	1,046,552			$	1,022,304			$	954,442			$	984,021			$	678,823			$	709,969			$	906,295
Current ratio			3.40				3.66				3.38				3.70				2.92				1.87				3.41
Depreciation and amortization		$	107,370			$	99,020			$	96,753			$	95,578			$	100,513			$	52,714			$	51,817
Capital expenditures		$	155,346			$	280,873			$	190,574			$	75,478			$	100,786			$	46,670			$	103,168
Investments in joint ventures		$	—			$	—			$	10,868			$	1,333			$	—			$	—			$	—
Acquisitions, net of cash acquired		$	2,565			$	3,360			$	13,164			$	11,978			$	4,017			$	—			$	250
Research and development expenses		$	82,246			$	78,919			$	77,083			$	58,394			$	60,918			$	44,509			$	41,518
Gross profit as a % of net sales			35.5				35.7				35.9				33.5				24.8				33.5				33.3
Total long-term debt		$	1,078,864			$	699,288			$	763,673			$	860,910			$	812,713			$	1,063,366			$	1,077,207
Total equity (1)		$	1,742,776			$	1,932,008			$	1,678,827			$	1,475,746			$	1,253,318			$	1,625,090			$	1,465,393
Total long-term debt as a % of total capitalization			38.2				26.6				31.3				36.8				39.3				39.6				42.4
Net debt as a % of total capitalization (2)			25.2				9.6				13.9				17.1				27.6				25.0				33.8

 

		Year ended December 31,																				Six months ended June 30,
($ in thousands, except per share amounts)		2013				2012				2011				2010				2009				2014				2013
Common Stock
Basic earnings (loss) per share
Continuing operations		$	4.88			$	3.44			$	4.35			$	3.38			$	1.64			$	1.78			$	1.88
Discontinued operations		$	0.05			$	0.05			$	(0.02	)		$	0.08			$	0.09			$	(0.78	)		$	0.05
Shares used to compute basic earnings per share			83,839				89,189				90,522				91,393				91,512				79,199				86,374
Diluted earnings (loss) per share
Continuing operations		$	4.85			$	3.42			$	4.30			$	3.35			$	1.63			$	1.77			$	1.87
Discontinued operations		$	0.05			$	0.05			$	(0.02	)		$	0.08			$	0.09			$	(0.78	)		$	0.05
Shares used to compute diluted earnings per share			84,322				89,884				91,522				92,184				92,046				79,602				86,862
Cash dividends declared per share		$	0.96			$	0.80			$	0.67			$	0.56			$	0.50			$	0.55			$	0.48
Total equity per share (1)		$	21.77			$	21.73			$	18.90			$	16.11			$	13.70			$	20.77			$	18.01
Return on average total equity			22.5	%			17.3	%			24.9	%			23.1	%			13.4	%			4.7	%			9.8	%

 

(1)	Equity reflects repurchase of common shares amounting to: 2013–9,198,056; 2012–1,092,767; 2011–3,000,000; 2010–400,356 and 2009–174,900.

(2)	Albemarle defines net debt as total debt plus the portion of outstanding joint venture indebtedness guaranteed by Albemarle (or less the portion of outstanding joint venture indebtedness consolidated but not guaranteed by Albemarle), less cash and cash equivalents.

Selected Historical Consolidated Financial Data of Rockwood

The selected historical consolidated financial data of Rockwood presented for the years ended December 31, 2013, 2012 and 2011 and as of December 31, 2013 and 2012 has been derived from Rockwood’s audited consolidated financial statements incorporated by reference into this joint proxy statement/prospectus. The selected historical consolidated financial data of Rockwood presented for each of the years ended December 31, 2010 and 2009 and as of December 31, 2011, 2010 and 2009 has been derived from Item 6. Selected Financial Data, in Rockwood’s 2013 Annual Report on Form 10-K incorporated by reference into this joint proxy statement/prospectus.

The selected historical consolidated financial data of Rockwood presented for the six months ended June 30, 2014 and 2013 and as of June 30, 2014 has been derived from Rockwood’s unaudited consolidated financial statements incorporated by reference into this joint proxy statement/prospectus and has been prepared on the same basis as our audited financial statements and, in Rockwood management’s opinion, includes all normal and recurring adjustments that Rockwood considers necessary for a fair presentation of Rockwood’s financial position and results of operations for such periods and as of such date.

All periods presented have been reclassified to account for the sale of the plastic compounding business in 2011, the sale of the advanced ceramics and clay-based additives businesses in 2013, and the sale of the titanium dioxide pigments, color pigments and services, timber treatment chemicals, rubber/thermoplastics compounding and water chemistry businesses on October 1, 2014, as discontinued operations. In addition, all prior periods presented have been reclassified to account for the impact of the accounting records that were falsified at a single location within the color pigments and services business of Rockwood’s former performance additives segment. For the years ended December 31, 2012, 2011 and 2010, net income and earnings per share on a diluted basis was reduced by $4.3 million ($0.05 per share), $11.9 million ($0.15 per share) and $8.0 million ($0.10 per share), respectively. For the year ended December 31, 2009, net income was increased by $0.2 million. The effect of these adjustments was a cumulative reduction in total equity of $34.0 million, $29.0 million, $18.6 million and $11.2 million as of December 31, 2012, 2011, 2010 and 2009, respectively. For the six months ended June 30, 2013, net income and earnings per share on a diluted basis were reduced by $2.3 million and $0.03 per share, respectively.

 

Rockwood’s historical results are not necessarily indicative of future results of operations of Rockwood or the combined company following completion of the merger, and you should read the following information together with Rockwood’s consolidated financial statements and the related notes incorporated by reference into this joint proxy statement/prospectus, as well as other information that has been filed by Rockwood with the SEC. See “Where You Can Find More Information” beginning on page 148 for information on where you can obtain copies of this information.

 

		Year ended December 31,																				Six months ended June 30,
($ in millions, except per share data; shares in thousands)		2013				2012				2011				2010				2009				2014				2013
Statement of operations data:
Net sales		$	1,377.8			$	1,323.8			$	1,354.1			$	1,178.5			$	1,011.2			$	716.8			$	685.0
Gross profit			618.0				586.7				581.3				513.1				428.3				324.9				310.6
Operating income			210.6				194.9				181.8				136.0				123.6				102.9				99.2
Amounts attributable to Rockwood Holdings, Inc. shareholders:
Income (loss) from continuing operations		$	55.4			$	232.9			$	70.2			$	86.4			$	(44.5	)		$	55.8			$	32.2
Income (loss) from discontinued operations			1,604.5				146.3				329.2				145.0				65.8				(29.9	)			16.7
Net income		$	1,659.9			$	379.2			$	399.4			$	231.4			$	21.3			$	25.9			$	48.9
Basic earnings (loss) per share attributable to Rockwood Holdings, Inc. shareholders:
Earnings (loss) from continuing operations		$	0.73			$	3.00			$	0.92			$	0.81			$	(0.60	)		$	0.76			$	0.41
Earnings (loss) from discontinued operations, net of tax			21.17				1.88				4.30				2.28				0.89				(0.41	)			0.22
Basic earnings per share		$	21.90			$	4.88			$	5.22			$	3.09			$	0.29			$	0.35			$	0.63
Diluted earnings (loss) per share attributable to Rockwood Holdings, Inc. shareholders:
Earnings (loss) from continuing operations		$	0.72			$	2.91			$	0.88			$	0.78			$	(0.60	)		$	0.75			$	0.41
Earnings (loss) from discontinued operations, net of tax			20.73				1.83				4.12				2.18				0.89				(0.40	)			0.21
Diluted earnings per share		$	21.45			$	4.74			$	5.00			$	2.96			$	0.29			$	0.35			$	0.62
Dividends declared per share of common stock		$	1.70			$	1.05			$	—			$	—			$	—			$	0.90			$	0.80
Other data:
Capital expenditures (1)		$	172.3			$	140.8			$	112.0			$	46.7			$	49.0			$	88.6			$	82.9
Adjusted EBITDA from continuing operations (2)			323.3				321.1				284.0				234.9				224.0				169.5				163.5

 

(1)	Net of government grants of $2.2 million, $9.4 million and $16.0 million for the years ended December 31, 2013, 2012 and 2011, respectively.

(2)

Consolidated EBITDA as adjusted (which we refer to in this joint proxy statement/prospectus as Adjusted EBITDA) is used in Rockwood’s debt agreements to determine compliance with financial covenants and Rockwood’s ability to engage in certain activities, such as incurring additional debt and making certain payments. In addition to covenant compliance, Rockwood’s management also uses Adjusted EBITDA to assess its operating performance and to calculate performance-based cash bonuses and determine whether certain performance-based restricted stock units vest, as both such bonuses and restricted stock units are tied to Adjusted EBITDA targets. Adjusted EBITDA contains other charges and gains for which Rockwood believes adjustment is permitted under its former senior secured credit agreement.

Adjusted EBITDA has limitations as an analytical tool, and should not be viewed in isolation and is not a substitute for U.S. generally accepted accounting principles (which we refer to in this joint proxy statement/prospectus as GAAP) measures of earnings and cash flows. Material limitations associated with making the adjustments to Rockwood’s earnings and cash flows to calculate Adjusted EBITDA, and using this non-GAAP financial measure as compared to the most directly comparable GAAP financial measures, include:

 

•

the cash portion of interest expense, net, income tax provision (benefit), and restructuring as well as charges related to securities issuance, acquisition and disposition activities, and systems/organization establishment, generally represent charges (gains) which may significantly affect funds available to use in our operating, investing and financing activities;

 

•

non-operating foreign exchange gains (losses), although not immediately affecting cash used in investing activities, may affect the amount of funds needed to service Rockwood’s debt if those currency impacts remain in place as Rockwood meets its future principal repayment obligations; and

 

•

depreciation, amortization, non-cash (gains) charges and impairment charges, though not directly affecting Rockwood’s current cash position, represent the wear and tear and/or reduction in value of the plant, equipment and intangible assets which permit Rockwood to manufacture and/or market its products; these items may be indicative of future needs for capital expenditures, for development or acquisition of intangible assets or relevant trends causing asset value changes.

A Rockwood shareholder or a potential Rockwood shareholder may find any one or all of these items important in evaluating Rockwood’s performance, results of operations, financial position and liquidity. Rockwood’s management compensates for the limitations of using non-GAAP financial measures by using them only to supplement Rockwood’s GAAP results to provide a more complete understanding of the factors and trends affecting Rockwood’s business. Adjusted EBITDA is not an alternative to net income (loss) or income (loss) from continuing operations before taxes or operating income or cash flows from operating activities as calculated and presented in accordance with GAAP. You should not rely on Adjusted EBITDA as a substitute for any such GAAP financial measures. You are urged to review the reconciliations of Adjusted EBITDA to GAAP financial measures and other financial information, in each case included or incorporated by reference into this joint proxy statement/prospectus. You are also urged not to rely on any single financial measure to evaluate Rockwood’s business. Rockwood’s measure of Adjusted EBITDA may not be comparable to those of other companies.

The following table sets forth a reconciliation of net income attributable to Rockwood to Adjusted EBITDA from continuing operations for the periods indicated:

 

		Year ended December 31,																				Six months ended June 30,
($ in millions)		2013				2012				2011				2010				2009				2014				2013
Net income attributable to Rockwood Holdings, Inc. shareholders		$	1,659.9			$	379.2			$	399.4			$	231.4			$	21.3			$	25.9			$	48.9
Net income (loss) attributable to noncontrolling interest—discontinued operations			1.0				14.7				40.6				9.1				(3.8	)			2.9				(0.9	)
Net income			1,660.9				393.9				440.0				240.5				17.5				28.8				48.0
Income tax (benefit) provision			(10.0	)			(124.8	)			15.3				(88.0	)			5.0				25.1				9.8
Loss (income) from discontinued operations, net of tax			65.0				(161.0	)			(250.5	)			(154.1	)			(62.0	)			29.1				(15.8	)
Gain on sale of discontinued operations, net of tax			(1,670.5	)			—				(119.3	)			—				—				(2.1	)			—
Income (loss) from continuing operations before taxes			45.4				108.1				85.5				(1.6	)			(39.5	)			80.9				42.0
Interest expense, net			82.3				64.5				83.1				135.2				152.4				27.8				46.7
Depreciation and amortization			93.5				89.3				88.0				85.4				87.2				51.1				45.2
Restructuring and other severance costs			17.5				35.3				11.4				2.7				6.9				5.6				8.6
Equity investment adjustments			—				—				—				—				—				5.2				—
Systems/organization establishment expenses			2.2				2.0				0.8				1.0				0.8				1.4				1.2
Acquisition and disposal costs			8.9				(2.1	)			0.3				1.1				0.2				1.6				3.5
Loss on early extinguishment/modification of debt			15.5				12.0				16.6				1.6				26.6				—				—
Asset write-downs and other			4.1				0.3				0.9				8.4				2.1				1.7				4.7
Gain on previously held equity interest			(16.0	)			—				—				—				—				—				—
Foreign exchange loss (gain) on financing activities, net			67.1				10.3				(3.2	)			1.3				(15.5	)			(5.8	)			10.5
Other			2.8				1.4				0.6				(0.2	)			2.8				—				1.1
Total Adjusted EBITDA from continuing operations		$	323.3			$	321.1			$	284.0			$	234.9			$	224.0			$	169.5			$	163.5

 

		As of December 31,																				As of June 30,
($ in millions)		2013				2012				2011				2010				2009				2014
Balance sheet data:
Cash and cash equivalents		$	1,522.8			$	1,266.1			$	315.2			$	316.1			$	264.0			$	696.3
Property, plant and equipment, net			842.8				719.6				655.5				607.4				630.7				884.4
Total assets			5,532.3				6,013.6				4,580.8				4,723.4				4,793.0				5,257.6
Total long-term debt, including current portion			1,295.4				2,219.8				1,410.8				1,839.9				2,116.3				1,292.3
Total equity			3,049.2				1,875.7				1,629.4				1,322.7				1,129.5				2,805.3

 

Selected Unaudited Pro Forma Condensed Combined Financial Data of Albemarle and Rockwood

The following unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the merger. The unaudited pro forma condensed combined balance sheet is based on the individual historical consolidated balance sheets of Albemarle and Rockwood as of June 30, 2014, and has been prepared to reflect the merger as if it occurred on June 30, 2014. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2013 and the six months ended June 30, 2014 combines the historical results of operations of Albemarle and Rockwood, giving effect to the merger as if it occurred on January 1, 2013.

These unaudited pro forma condensed combined financial statements are for informational purposes only. They do not purport to indicate the results that would actually have been obtained had the merger been completed on the assumed date or for the periods presented, or which may be realized in the future. A final determination of the fair value of Rockwood’s assets and liabilities will be based on the actual net tangible and intangible assets and liabilities of Rockwood that exist as of the date of completion of the merger and, therefore, cannot be made prior to that date. Additionally, the value of the portion of the merger consideration to be paid in shares of Albemarle common stock will be determined based on the trading price of Albemarle common stock at the time of the completion of the merger. Accordingly, the accompanying unaudited pro forma purchase price allocation is preliminary and is subject to further adjustments as additional information becomes available and as additional analyses are performed. The preliminary unaudited pro forma purchase price allocation has been made solely for the purpose of preparing the accompanying unaudited pro forma condensed combined financial statements. There can be no assurance that such finalization will not result in material changes from the preliminary purchase price allocation included in the accompanying unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined financial statements should be read in conjunction with: (1) the accompanying notes to the unaudited pro forma condensed combined financial statements beginning on page 115; (2) Albemarle’s audited consolidated financial statements and related notes thereto contained in its Current Report on Form 8-K which was filed on August 8, 2014, to recast certain portions of Albemarle’s Annual Report on Form 10-K for the year ended December 31, 2013 to reflect the antioxidant, ibuprofen and propofol businesses as discontinued operations and to reflect a change in reportable segments which became effective on January 1, 2014, and Albemarle’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014; and (3) Rockwood’s audited consolidated financial statements and related notes thereto contained in its Annual Report on Form 10-K for the year ended December 31, 2013 and Rockwood’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014.

 

		Six Months Ended				Year Ended
($ in millions, except per share data)		June 30, 2014				December 31, 2013
Net sales		$	1,921.4			$	3,772.1
Operating income		$	250.0			$	714.3
Net income from continuing operations		$	172.6			$	420.5
Earnings per share, Basic		$	1.51			$	3.50
Earnings per share, Diluted		$	1.50			$	3.46

 

($ in millions)		June 30, 2014
Total Current Assets		$	1,759.2
Property, plant and equipment, net		$	2,813.1
Goodwill		$	2,659.5
Total Assets		$	10,131.3
Long-term debt, including current portion		$	3,960.4
Total equity		$	3,807.8

 

Unaudited Comparative Per Share Data

Presented below are Albemarle’s and Rockwood’s historical per share data for the six months ended June 30, 2014 and the year ended December 31, 2013 and unaudited pro forma combined per share data for the six months ended June 30, 2014 and the year ended December 31, 2013. This information should be read together with the consolidated financial statements and related notes of Albemarle and Rockwood that are incorporated by reference in this joint proxy statement/prospectus and with the unaudited pro forma combined condensed financial information included under “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 115. The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the merger had been completed as of the beginning of the periods presented, nor is it necessarily indicative of the future operating results or financial position of the combined company. The historical book value per share is computed by dividing total shareholders’ equity by the number of shares of common stock outstanding at the end of the period. The pro forma income per share of the combined company is computed by dividing the pro forma income by the pro forma weighted average number of shares outstanding. The pro forma book value per share of the combined company is computed by dividing total pro forma shareholders’ equity by the pro forma number of shares of common stock outstanding at the end of the period. The Rockwood unaudited pro forma equivalent per share financial information is computed by multiplying the Albemarle unaudited pro forma combined per share amounts by the exchange ratio (0.4803 of a share of Albemarle common stock for each share of Rockwood common stock). The Rockwood pro forma equivalent per share amounts assume each Rockwood shareholder receives the merger consideration only in the form of Albemarle common stock. This presentation portrays the equivalent pro forma earnings, dividends and book value per share for one share of Rockwood common stock, and does not take into account the $50.65 cash payment by Albemarle for each share of Rockwood common stock at the time of the merger. Book value per share amounts are not calculated for December 31, 2013 on a pro forma basis as purchase accounting adjustments in the unaudited pro forma statements have been estimated only as of June 30, 2014.

 

		Six Months Ended				Year Ended
Albemarle—Pro Forma		June 30, 2014				December 31, 2013
Net income from continuing operations ($ millions)		$	172.6			$	420.5
Basic income from continuing operations per share		$	1.51			$	3.50
Diluted income from continuing operations per share		$	1.50			$	3.46
Book value per share as of June 30, 2014		$	32.78				N/A
Dividends declared per share of common stock		$	0.55			$	0.96
		Six Months Ended				Year Ended
Albemarle—Historical		June 30, 2014				December 31, 2013
Net income from continuing operations ($ millions)		$	155.4			$	435.7
Basic income from continuing operations per share		$	1.96			$	5.20
Diluted income from continuing operations per share		$	1.95			$	5.17
Book value per share as of June 30, 2014		$	19.21			$	20.33
Dividends declared per share of common stock		$	0.55			$	0.96
		Six Months Ended				Year Ended
Rockwood—Historical		June 30, 2014				December 31, 2013
Net income from continuing operations ($ millions)		$	55.8			$	55.4
Basic income from continuing operations per share		$	0.76			$	0.73
Diluted income from continuing operations per share		$	0.75			$	0.72
Book value per share as of June 30, 2014		$	37.20			$	39.19
Dividends declared per share of common stock		$	0.90			$	1.70
		Six Months Ended				Year Ended
Rockwood Equivalent Pro Forma		June 30, 2014				December 31, 2013
Net income from continuing operations ($ millions)			N/A				N/A
Basic income from continuing operations per share		$	0.72			$	1.68
Diluted income from continuing operations per share		$	0.72			$	1.66
Book value per share as of June 30, 2014		$	15.74			$	N/A
Dividends declared per share of common stock		$	0.26			$	0.46

Market Prices and Dividend Information

Albemarle common stock is listed for trading on the NYSE under the symbol “ALB” and Rockwood common stock is listed for trading on the NYSE under the symbol “ROC.”

The following table presents the closing prices of shares of Albemarle common stock and shares of Rockwood common stock, as reported on the NYSE on:

 

•

July 14, 2014, the last full trading day prior to the public announcement of the merger agreement; and

 

•

September 30, 2014, the latest practicable date prior to mailing this joint proxy statement/prospectus;