Degussa/SKW merger delayed by shareholder legal action

08 December 2000 11:31  [Source: ICIS news]

LONDON (CNI)--Legal action by shareholders has delayed by up to three months the merger by German industrial group E.ON of its two chemicals subsidiaries, Degussa-Huls and SKW Trostberg, CNI learned on Friday.

Degussa-Huls said two of its shareholders and one SKW shareholder have filed motions to annul the merger resolutions. As a result, a special legal procedure now has to be followed to obtain permission to register the merged company.

A spokeswoman for Degussa-Huls said the merger is now expected to be completed "in the first months" of 2001. The merged company, to be named Degussa AG, was due to start operations this month.

E.ON's chairman Ulrich Hartmann said he plans to expand vigorously Degussa AG in its high growth and high margin segments, especially in health and nutrition and fine and industrial chemicals. He believes North America and Asia offer particularly interesting growth opportunities.

Hartmann added that E.ON is working hard to implement the chemicals divestment programme and the first moves are expected to be made early next year. Assets earmarked for disposal include Degussa-Huls' Phenolchemie, dental, plasticisers, textile additives and zeolites units and Degussa Bank plus SKW's metallurgical chemicals, gelatins, salt products and industrial chemicals activities.

Prior to the merger announcement, Degussa-Huls said it would sell Asta Medica and the precious metals and catalysts unit dmc², while SKW said it would divest its fertiliser subsidiary SKW Piesteritz.

In a review of its nine months performance, E.ON said strong demand and favourable currency effects enabled the chemicals division to lift operating profits by 34% to Euro507m ($443m). Chemicals sales for the nine month period increased 30% to Euro14.82bn, thanks to increases in both volumes and prices.

Degussa-Huls' nine months profits were boosted by synergy effects from the merger of Degussa and Huls last year. Merger synergies currently amount to Euro131m, said E.ON, which is nearly three-quarters of the Euro180m in total planned annual synergies.

The nine months results from Degussa-Huls and SKW Trostberg were reported in detail by CNI last month.

By: Anna Jagger
+1 713 525 2653

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