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Chemtura shares skyrocket after agreeing to Lanxess buyout

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Shares of chemical firm Chemtura climbed nearly 16 percent on Monday after accepting a $2.5 billion buyout offer from German chemical maker Lanxess.

Lanxess said Monday it will pay Chemtura shareholders $33.50 per share in cash, about a 19 percent premium to the Philadelphia's company's Friday closing price of $28.18.

"The transaction provides premium value to our shareholders and benefits our customers and employees by making Chemtura part of a much larger, stronger global enterprise with the resources to fully support a more diverse suite of specialty chemicals products and services," Craig Rogerson, CEO and chairman of the board of Chemtura, said in a press release.

Lanxess said it expects annual synergies of about 100 million euro (about $113 million) by 2020.

Both companies' board's approved the deal, which is expected to close around mid-2017.

With Monday's gains, Chemtura's stock is up more than 19 percent this year.

Chemtura 2016 Chart

— CNBC's Fred Imbert and The Associated Press contributed to this report.