Cologne, Germany – Lanxess has announced the first acquisition since a major realignment that has included moving its rubber business into a 50/50 joint venture with Saudi Aramco.
Under a deal announced 25 April, the Cologne group is to add Chemours’ Clean and Disinfect business to its Material Protection Products business unit.
The business comprises active ingredients as well as speciality chemicals used especially in disinfectant and hygiene solutions, for example those used in veterinary and farm management applications.
Lanxess will dip into existing liquidity pay to pay DuPont spinoff Chemours around €210 million in a deal slated to close in the second half of 2016 – subject to antitrust approvals.
According to Lanxess, the acquired business should generate annual earnings (EBITDA) of around €20-30 million, including around €10 million from synergies, by 2020.
“We plan to enhance our position particularly in mid-sized, less cyclical markets with high margins and sound growth prospects,” said Matthias Zachert, chairman of the German group.
“We have made quick headway and are now expanding our specialty chemicals portfolio which will make us more profitable and more resilient,” he added.
The deal comes soon after the 1 April launch of Arlanxeo, the JV formed through Lanxess’ sale of a 50-percent stake in its synthetic rubber business to Saudi Aramco for €1 .2 billion.
Poor returns from the business in recent years, largely due to overcapacity in the market, prompted Lanxess to restructure its entire business set-up.
Integration with Aramco’s feedstock production is expected to generate synergies and competitive advantages for Arlanxeo, once contracts with existing feedstock suppliers are completed.