06 May 2014 19:38 [Source: ICIS news]
(updates throughout with remarks by CEO at Q&A during analysts' call)
(LONDON (ICIS)--Evonik is currently considering a number of smaller deals, and it will not rule out a bigger acquisition of more than €1bn either, the CEO of the Germany-based specialty chemicals major said on Tuesday.
While Evonik would not "rush into any adventures", it does not want to stand at the sideline as the industry continues to consolidate, CEO Klaus Engel told analysts during Evonik’s first-quarter earnings call.
However, Engel declined to comment on market speculation that Evonik may be interested in the Bayer MaterialScience (BMS) business. Evonik was monitoring developments "very, very closely", he said when an analyst asked specifically about BMS.
Engel also said that Evonik may swap part of its business with that of another firm.
"Our preferred targets are growth businesses with leading market and technology positions which are earnings-per-share and margin-accretive and operate in similar or adjacent market [to Evonik]," he said.
Any deals would strengthen the "less cyclical, more defensive part" of Evonik’s portfolio, Engel said. The deals could be similar to Evonik’s recent acquisition of Silbond, a US-based producer of organo-silanes, he added.
"A few smaller acquisitions are under consideration and could be realised already during the remainder of 2014," he said.
"Larger acquisitions are not ruled out, but of course, they just do not happened at the click of a button," he said.
Evonik’s strong balance sheet offered considerable opportunities, the CEO said.
"We have the financial capability to acquire significant mid-sized targets," he said. He would not rule out that Evonik may raise additional equity capital to help finance a deal.
At the same time, as part of its active portfolio management, Evonik may divest some businesses that no longer fit in with it strategies, he said.
Engel added that while Evonik was facing headwinds in its lysine business and was not happy with its performance, it would hold on to lysine for the time being. "Currently, we do not foresee an exit of the lysine business right away," he said.
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