Germany’s LANXESS to acquire US’ Chemtura for about $2.5bn

26 September 2016 04:09 Source:ICIS News

(re-leads to LANXESS statement)

(Clarification: Recasts opening paragraph clarifying that the $2.5bn acquisition figure is attributed to Chemtura)

SINGAPORE (ICIS)-- LANXESS is acquiring US’ Chemtura to expand its footprint in North America, the German specialty chemicals producer said on Monday, in a deal valued by the US firm at $2.5bn.

The two companies have signed a definitive acquisition agreement, in which Chemtura shareholders will receive $33.50/share, which represents an 18.9% premium to the US firm’s closing price on 23 September.

LANXESS said it will finance the acquisition mainly through senior and hybrid bonds, as well as from existing liquidity.

The acquisition is expected to be completed around mid-2017.

US-based Chemtura is a producer of high-quality flame retardants and lubricant additives, as well as urethanes and organometallics.

LANXESS expects the acquisition for be earnings accretive on the first fiscal year, with annual synergies estimated at €100m by 2020.

“With the largest acquisition in its history, LANXESS is building on its own additives portfolio and will become one the world’s major actors in this growing market,” the German producer said.

Chemtura – which is headquartered in Philadelphia, Pennsylvania – has 20 sites in 11 countries and has about 2,500 employees globally.

In the last four quarters, the US firm generated sales of about €1.5bn, about 45% of which is generated in North America.

The company posted pre-exceptional earnings before interest, tax, depreciation and amortisation (EBITDA) of about €245m during the same period, according to LANXESS.

“We are significantly building on our competitive positioning in medium-sized markets and increasing our presence in North America. LANXESS is taking a next and major step forward on its growth path,” LANXESS chairman Matthias Zachert said in the statement.

LANXESS has about 16,700 employees in 29 countries and has 55 production site worldwide. It generated sales of €7.9bn last year.

By Pearl Bantillo