Lanxess acquires US-based Chemtura for over Rs 16k cr
27 April 2017
Global chemical manufacturer Lanxess on Wednesday acquired US based Chemtura, which primary deals in flame retardant and lubricant additives, for a total enterprise value of Euro 2.4 billion approx Rs 16 lakh crore.
The company said, in a statement, Chemtura is the largest acquisition in the history of Lanxess. Chemturas shareholders already approved the acquisition in February 2017.
After this development, Lanxess will further expand its additives portfolio. In addition to additives, Chemturas urethanes and organometallics businesses will be integrated into the Lanxess portfolio.
The Cologne based speciality chemicals company will absorb some 2,500 Chemtura employees at 20 sites in 11 countries worldwide.
The acquisition of Chemtura is another major step in our realignment process and a significant milestone in our course of growth. The new Lanxess is increasingly taking shape. The expansion of the additives business gives Lanxess an additional strong pillar. In its new set up and with an even more balanced portfolio, the company will be much more stable and profitable. At the same time, Chemtura considerably strengthens our presence in the North American growth region, said Matthias Zachert, Chairman of the Board of Management of Lanxess.
We will now focus our energy on rapidly and smoothly integrating the new businesses and employees, as well as on optimally serving our new and existing customers.
Through the acquisition, Lanxess increased its footprint in North America. In this region, the company is now represented at 24 production sites previously 12 and employs approximately 2,800 staff previously 1,500. The regions share in global sales increases from approximately 17 percent to approximately 21 percent, said the company.
The expected annual synergy effects from the transaction amount to approximately EUR 100 million approx Rs 600 crore with realisation targeted until 2020. The acquisition of Chemtura is already expected to be accretive to Lanxesss earnings per share in the first full fiscal year after closing.
Lanxess financed the acquisition through two corporate bonds and a hybrid bond as well as cash. The bonds were successfully placed at attractive terms already in 2016.
Source:economictimes.indiatimes.com