UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


SCHEDULE 13G
(Rule 13d-102)

Information Statement Pursuant to Rules 13d-1 and 13d-2
Under the Securities Exchange Act of 1934
(Amendment No. 3)*


W.R. Grace & Co.
(Name of Issuer)

Common Stock
(Title of Class of Securities)


38388F108
(CUSIP Number)


December 31, 2007
Date of Event Which Requires Filing of the Statement


Check the appropriate box to designate the rule pursuant to which this Schedule is filed:
 
o
Rule 13d-1(b)
x
Rule 13d-1(c)
o
Rule 13d-1(d)
 
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
 
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 

Page 1 of 13

CUSIP NO. 38388F108
13G
Page 2 of 13 Pages


 
1.
 
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
 
Citadel Investment Group, L.L.C.
 
2.
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) x 
 
3.
 
SEC USE ONLY
 
4.
 
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware limited liability company
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
 
5.
 
SOLE VOTING POWER
0
 
6.
 
SHARED VOTING POWER
 
4,093,241 shares
 
7.
 
SOLE DISPOSITIVE POWER
0
 
8.
 
SHARED DISPOSITIVE POWER
See Row 6 above.
 
9.
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Row 6 above.
 
10.
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES         o          
 
11.
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
Approximately 5.8%(1) as of December 31, 2007.
 
12.
 
TYPE OF REPORTING PERSON
OO; HC
(1)
Based on 70,409,225 outstanding shares of the Common Stock of Issuer, as reported in the Issuer’s Quarterly Report on Form 10-Q for the period ended September 30, 2007, as filed with the Securities and Exchange Commission on November 8, 2007.

 

Page 2 of 13

CUSIP NO. 38388F108
13G
Page 3 of 13 Pages



 
1.
 
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
 
Citadel Investment Group II, L.L.C.
 
2.
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) x 
(b) o 
 
3.
 
SEC USE ONLY
 
4.
 
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware limited liability company
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
 
5.
 
SOLE VOTING POWER
0
 
6.
 
SHARED VOTING POWER
 
4,093,241 shares
 
7.
 
SOLE DISPOSITIVE POWER
0
 
8.
 
SHARED DISPOSITIVE POWER
See Row 6 above.
 
9.
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Row 6 above.
 
10.
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES         o          
 
11.
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
Approximately 5.8%(2) as of December 31, 2007.
 
12.
 
TYPE OF REPORTING PERSON
OO; HC
(2)
See footnote 1 above.
 

Page 3 of 13

CUSIP NO. 38388F108
13G
Page 4 of 13 Pages



 
1.
 
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
 
Citadel Limited Partnership
 
2.
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) x 
(b) o 
 
3.
 
SEC USE ONLY
 
4.
 
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware limited partnership
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
 
5.
 
SOLE VOTING POWER
0
 
6.
 
SHARED VOTING POWER
 
4,093,241 shares
 
7.
 
SOLE DISPOSITIVE POWER
0
 
8.
 
SHARED DISPOSITIVE POWER
See Row 6 above.
 
9.
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Row 6 above.
 
10.
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES         o          
 
11.
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
Approximately 5.8%(3) as of December 31, 2007.
 
12.
 
TYPE OF REPORTING PERSON
PN; HC
(3)
See footnote 1 above.

 

Page 4 of 13

CUSIP NO. 38388F108
13G
Page 5 of 13 Pages



 
1.
 
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
 
Kenneth Griffin
 
2.
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) x 
(b) o 
 
3.
 
SEC USE ONLY
 
4.
 
CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. Citizen
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
 
5.
 
SOLE VOTING POWER
0
 
6.
 
SHARED VOTING POWER
 
4,093,241 shares
 
7.
 
SOLE DISPOSITIVE POWER
0
 
8.
 
SHARED DISPOSITIVE POWER
See Row 6 above.
 
9.
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Row 6 above.
 
10.
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES         o          
 
11.
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
Approximately 5.8%(4) as of December 31, 2007.
 
12.
 
TYPE OF REPORTING PERSON
IN; HC
(4)
See footnote 1 above.

 

Page 5 of 13

CUSIP NO. 38388F108
13G
Page 6 of 13 Pages



 
1.
 
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
 
Citadel Holdings I LP
 
2.
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) x 
(b) o 
 
3.
 
SEC USE ONLY
 
4.
 
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware limited partnership
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
 
5.
 
SOLE VOTING POWER
0
 
6.
 
SHARED VOTING POWER
 
4,093,241 shares
 
7.
 
SOLE DISPOSITIVE POWER
0
 
8.
 
SHARED DISPOSITIVE POWER
See Row 6 above.
 
9.
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Row 6 above.
 
10.
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES         o          
 
11.
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
Approximately 5.8%(5) as of December 31, 2007.
 
12.
 
TYPE OF REPORTING PERSON
PN; HC
(5)
See footnote 1 above.

 

Page 6 of 13

CUSIP NO. 38388F108
13G
Page 7 of 13 Pages



 
1.
 
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
 
Citadel Equity Fund Ltd.
 
2.
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) x 
(b) o 
 
3.
 
SEC USE ONLY
 
4.
 
CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands company
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
 
5.
 
SOLE VOTING POWER
0
 
6.
 
SHARED VOTING POWER
 
4,093,241 shares
 
7.
 
SOLE DISPOSITIVE POWER
0
 
8.
 
SHARED DISPOSITIVE POWER
See Row 6 above.
 
9.
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Row 6 above.
 
10.
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES         o          
 
11.
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
Approximately 5.8%(6) as of December 31, 2007.
 
12.
 
TYPE OF REPORTING PERSON
CO
(6)
See footnote 1 above.
 

Page 7 of 13

CUSIP NO. 38388F108
13G
Page 8 of 13 Pages



 
1.
 
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
 
Citadel Derivatives Group LLC
 
2.
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) x 
(b) o 
 
3.
 
SEC USE ONLY
 
4.
 
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware limited liability company
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
 
5.
 
SOLE VOTING POWER
0
 
6.
 
SHARED VOTING POWER
 
4,093,241 shares
 
7.
 
SOLE DISPOSITIVE POWER
0
 
8.
 
SHARED DISPOSITIVE POWER
See Row 6 above.
 
9.
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Row 6 above.
 
10.
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES         o          
 
11.
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
Approximately 5.8%(7) as of December 31, 2007.
 
12.
 
TYPE OF REPORTING PERSON
OO; BD
(7)
See footnote 1 above.

 

Page 8 of 13

CUSIP NO. 38388F108
13G
Page 9 of 13 Pages


Item 1(a)    Name of Issuer:     W.R. GRACE & CO.
1(b)     Address of Issuer’s Principal Executive Offices:
 
7500 Grace Drive
Columbia, MD 21044

Item 2(a)    Name of Person Filing(8)
Item 2(b)    Address of Principal Business Office
Item 2(c)    Citizenship
 
 
Citadel Investment Group, L.L.C.
 
131 S. Dearborn Street
 
32nd Floor
 
Chicago, Illinois 60603
 
Delaware limited liability company
   
 
Citadel Investment Group II, L.L.C.
 
131 S. Dearborn Street
 
32nd Floor
 
Chicago, Illinois 60603
 
Delaware limited liability company
   
 
Citadel Limited Partnership
 
131 S. Dearborn Street
 
32nd Floor
 
Chicago, Illinois 60603
 
Delaware limited partnership
   
 
Kenneth Griffin
 
131 S. Dearborn Street
 
32nd Floor
 
Chicago, Illinois 60603
 
U.S. Citizen
   
 
Citadel Holdings I LP
 
c/o Citadel Investment Group II, L.L.C.
 
131 S. Dearborn Street
 
32nd Floor
 
Chicago, Illinois 60603
 
Delaware limited partnership

 
(8) Citadel Holdings Ltd., a Cayman Islands company (“CH”), is majority owned by Citadel Kensington Global Strategies Fund Ltd., a Bermuda company (“CKGSF”). Citadel Equity Fund Ltd. (“CEF”) is a subsidiary of CH. CKGSF and CH do not have control over the voting or disposition of securities held by CEF. Until December 31, 2007, Citadel Wellington LLC, a Delaware limited liability company (“CW”), was the majority owner of Citadel Derivatives Group LLC (“CDG”). Effective January 1, 2008, Citadel Derivatives Group Investors LLC, a Delaware limited liability company ("CDGI"), became the majority owner of CDG. CW did not, and CDGI does not, have control over the voting or disposition of securities held by CDG. Citadel Investment Group II, L.L.C. and Citadel Holdings I LP are included in this filing as Reporting Persons even though such entities did not have control over the voting or disposition of securities held by CDG until January 1, 2008.

Page 9 of 13

CUSIP NO. 38388F108
13G
Page 10 of 13 Pages



 
Citadel Equity Fund Ltd.
 
c/o Citadel Investment Group, L.L.C.
 
131 S. Dearborn Street
 
32nd Floor
 
Chicago, Illinois 60603
 
Cayman Islands company
   
 
Citadel Derivatives Group LLC
 
c/o Citadel Investment Group II, L.L.C.
 
131 S. Dearborn Street
 
32nd Floor
 
Chicago, Illinois 60603
 
Delaware limited liability company

2(d)   Title of Class of Securities:
 
Common Stock, par value $0.01.
 
2(e)   CUSIP Number:                   38388F108
 
Item 3  If this statement is filed pursuant to Rules 13d-1(b), or 13d-2(b) or (c), check whether the person filing is a:
 
 
(a)
[__]
Broker or dealer registered under Section 15 of the Exchange Act;
 
 
(b)
[__]
Bank as defined in Section 3(a)(6) of the Exchange Act;
 
 
(c)
[__]
Insurance company as defined in Section 3(a)(19) of the Exchange Act;
 
 
(d)
[__]
Investment company registered under Section 8 of the Investment Company Act;
 
 
(e)
[__]
An investment adviser in accordance with Rule 13d-1(b)(1)(ii)(E);
 
 
(f)
[__]
An employee benefit plan or endowment fund in accordance with Rule 13d-1(b)(1)(ii)(F);
 
 
(g)
[__]
A parent holding company or control person in accordance with Rule 13d-1(b)(1)(ii)(G);
 
 
(h)
[__]
A savings association as defined in Section 3(b) of the Federal Deposit Insurance Act;
 
 
(i)
[__]
A church plan that is excluded from the definition of an investment company under Section 3(c)(14) of the Investment Company Act;
 
 
(j)
[__]
Group, in accordance with Rule 13d-1(b)(1)(ii)(J).
 
If this statement is filed pursuant to Rule 13d-1(c), check this box. x 
 

Page 10 of 13

CUSIP NO. 38388F108
13G
Page 11 of 13 Pages


Item 4  Ownership:
 
CITADEL INVESTMENT GROUP, L.L.C.
CITADEL INVESTMENT GROUP II, L.L.C.
CITADEL LIMITED PARTNERSHIP
KENNETH GRIFFIN
CITADEL HOLDINGS I LP
CITADEL EQUITY FUND LTD.
CITADEL DERIVATIVES GROUP LLC

(a)    Amount beneficially owned:
 
4,093,241 shares
 
(b)    Percent of Class: 
 
Approximately 5.8%(9) as of December 31, 2007.
 
(c)    Number of shares as to which such person has:
 
(i)    sole power to vote or to direct the vote:
 
     
0
 
(ii)    shared power to vote or to direct the vote:
 
See Item 4(a) above.
 
(iii)    sole power to dispose or to direct the disposition of:
 
     
0
 
(iv)    shared power to dispose or to direct the disposition of:
 
See Item 4(a) above.
 
Item 5    Ownership of Five Percent or Less of a Class:

Not Applicable.

Item 6    Ownership of More than Five Percent on Behalf of Another Person:

Not Applicable.

 
(9)
See footnote 1 above.
 

Page 11 of 13

CUSIP NO. 38388F108
13G
Page 12 of 13 Pages


Item 7    Identification and Classification of the Subsidiary which Acquired the Security Being Reported on by the Parent Holding Company:

See Item 2 above.

Item 8    Identification and Classification of Members of the Group:

Not Applicable.

Item 9    Notice of Dissolution of Group:

Not Applicable.

Item 10   Certification:

By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.
 
* John C. Nagel is signing on behalf of Kenneth Griffin as attorney-in-fact pursuant to a power of attorney previously filed with the Securities and Exchange Commission on February 24, 2006, and hereby incorporated by reference herein. The power of attorney was filed as an attachment to a filing by Citadel Limited Partnership on Schedule 13G for Morgans Hotel Group Co.

Page 12 of 13

CUSIP NO. 38388F108
13G
Page 13 of 13 Pages


After reasonable inquiry and to the best of its knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.
 
Dated this 13th day of February, 2008.

KENNETH GRIFFIN
 
By: /s/ John C. Nagel   
John C. Nagel, attorney-in-fact*
 
CITADEL LIMITED PARTNERSHIP
 
By: Citadel Investment Group, L.L.C.,
its General Partner
 
By: /s/ John C. Nagel   
John C. Nagel, Authorized Signatory
 
CITADEL DERIVATIVES GROUP LLC
 
By: Citadel Holdings I LP,
its Manager
 
By: Citadel Investment Group II, L.L.C.,
its General Partner
 
By: /s/ John C. Nagel   
John C. Nagel, Authorized Signatory
 
CITADEL INVESTMENT GROUP II, L.L.C.
 
By: /s/ John C. Nagel   
John C. Nagel, Authorized Signatory
 
CITADEL HOLDINGS I LP
 
By: Citadel Investment Group II, L.L.C.,
its General Partner
 
By: /s/ John C. Nagel   
John C. Nagel, Authorized Signatory
CITADEL EQUITY FUND LTD.
 
By: Citadel Limited Partnership,
its Portfolio Manager
 
By: Citadel Investment Group, L.L.C.,
its General Partner
 
By: /s/ John C. Nagel   
John C. Nagel, Authorized Signatory
 
CITADEL INVESTMENT GROUP, L.L.C.
 
By: /s/ John C. Nagel   
John C. Nagel, Authorized Signatory
 
 
 


Page 13 of 13