Investment bankers are keeping busy with chemical companies lately. For example, yesterday The Dow Chemical Company (NYSE: DOW) announced a $15.4 billion buyout of Rohm & Haas (NYSE: ROH), which even included an investment from Warren Buffett.

Then today, we got another deal. That is, Ashland Inc. (NYSE: ASH), which is the #1 chemical distributor in the US, has agreed to pay $3.3 billion for Hercules Inc. (NYSE: HPC). The consideration is a mixture of cash and stock. Moreover, Bank of America Corporation (NYSE: BAC) and Scotia Capital will provide the bank financing on the transaction.

Hercules got its start in 1912, as a spin-off from E.I. du Pont de Nemours & Company (NYSE: DD). Now, the company is a major provider of water-treatment chemicals (with a focus on the pulp and paper industries). It's an attractive segment – especially because of the opportunities in emerging markets.

Last year, Hercules posted revenues of roughly $2.2 billion. However, recently the company has had some issues with shortages of raw materials.

However, with the merger, the combined revenues will come to $10 billion per year. What's more, it looks like there will be $50 million in cost savings (by the third year, after the close of the merger).

But, this deal is not cheap (hey, growth usually isn't). As a result, investors dumped on Ashland's stock price, which is down 13% to $41.19.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.