18 December 2006 09:48 [Source: ICIS news]
LONDON (ICIS news)--Dow Chemical has agreed to acquire cellulose firm Wolff Walsrode from Bayer in a deal which would create a $1bn (€764m) water soluble polymers business, the two companies said on Monday.
The transaction was expected to close in the first half of 2007, subject to regulatory approval. Financial terms were not disclosed.
Dow said the deal would help the company strengthen its performance business portfolio as part of its goal to dampen earnings cyclicality while driving growth.
Bayer said that the sale, together with the divestment of its metals and powders subsidiary HC Starck to private equity firms Advent International and the Carlyle Group, would help finance its acquisition of Schering.
Wolff Walsrode had revenues of more than $400m and would become an integral part of Dow’s water soluble polymers business.
“The acquisition will create a $1bn performance business for Dow,” said Romeo Kreiberg, Dow’s executive vice president for the performance plastics and chemicals portfolios.
The new business would combine Wolff’s production technology and hydroxyethyl methyl cellulose (HEMC) and carboxymethyl cellulose chemistry with Dow’s hydroxypropyl methyl cellulose (HPMC) product brands and expertise.
The cellulose derivatives produced by the two companies are used in applications for the construction materials, personal care, pharmaceuticals, food and specialty sectors.
Wolff Walsrode employs some 1,500 people and had net sales of €329m in 2005. Its main sites are in the ?xml:namespace>
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