Cytec Buys Out Dyno In European Resins JV; Gets Amino Resins Unit

29 June 1998 00:00  [Source: ICB Americas]

By Alex Tullo

Cytec Industries Inc. and Dyno Industrier ASA have signed an agreement under which Cytec will acquire DynoÕs 50 percent interest in Dyno-Cytec, their European cross-linking resins joint venture, and DynoÕs global amino coating resins business. The deal, worth NOK 420 million ($56 million), is expected to close in the third quarter.

Cytec will obtain DynoÕs amino resins plant in Lillestrom, Norway, along with its commercial and marketing staff. The deal also requires Cytec to continue the Dyno-Cytec operations at Lillestrom, as well as service and delivery arrangements.

Established in 1984, the ventureÕs Lillestrom facility produces about 25,000 metric tons of methylated and butylated amino resins and has annual sales of about $50 million. In 1997, the businessÕs operating profits were NOK 30 million, giving it higher operating profit margins than Cytec.

ÒAmino cross-linking resins have been an area with a strategic priority for both Dyno and Cytec,Ó says Dag Mejdell, Dyno IndustrierÕs CEO. ÒBut we have concluded after extensive evaluation that it is in the best interests of the business to be developed by Cytec alone.Ó

In the early 1960s, Cytec introduced its first Cymel monomeric crosslinking methylated melamine resin. The company has been manufacturing butylated urea and melamine resins since the 1930s.

Dyno says it will gain a pre-tax profit of approximately NOK 350 million from the sale. ÒDynoÕs attractive profit on this sale gives us increased financial freedom and a greater opportunity for growth in our core business area of explosives, adhesives for the woodworking industry, paper overlays, oilfield chemicals and particles,Ó Mr. Mejdell says.

ÒThe sale of our amino cross-linking resins activity increases the need for finding a strategic alliance partner for DynoÕs remaining coating resin business,Ó adds Jorn Lunde, DynoÕs executive vice-president.

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