Lanxess buys controlling stake in Petroflex

ERJ staff report (DS)

Leverkusen, Germany -- Lanxess is to buy about 70 percent of the equity in Petroflex S.A, Brazil, at a provisional price equivalent to EUR 198 million. Petroflex, a listed company based in Rio de Janeiro, is among the world's large-scale producers of synthetic rubber. The stake to be purchased by Lanxess includes the holdings of the current major shareholders Braskem and Unipar. The transaction requires the approval of the relevant antitrust authorities.

In 2006 Petroflex had some 1300 employees and sales equivalent to about EUR 500 million. The group's 2007 output at its three sites in Brazil - Cabo in Pernambuco State, Duque de Caxias in Rio de Janeiro State and Triunfo in the State of Rio Grande do Sul - will exceed 400 000 tons. Its elastomer products range from solution rubber to emulsion rubber and comprise 70 brands. The products are used especially in the manufacture of tyres as well as for tubing and plastics. One third of its output is exported to more than 70 countries.

The IISRP lists Petroflex as operating three factories in Brazil. The Cabo unit is listed as having capacity for 90 kt/year of BR; 25 kt/year for solid S-SBR and 10 kt/year of styrenic block copolymers. The Duque de Caxias unit is listed as having annual capacity for 196 kt of solid e-SBR, while the Triunfo unit has annual capacity for 60 kt of solid E-SBR and 20 kt of nitrile rubber (NBR). This adds to 401 kt/year.

Lanxess said it would submit a public takeover offer for the remaining ordinary shares at the proper time under Brazilian law. "As is customary with such transactions, the final purchase price, including financial liabilities to be assumed, will be determined after closing,” explained Chief Financial Officer Matthias Zachert. "We are financing the acquisition from liquidity and existing credit facilities,” he added. The financial liabilities as of September 30, 2007, amounted to EUR 109 million.

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Press release from Lanxess