'New Lanxess' to acquire Chemtura for €2.4bn

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Cologne, Germany – Lanxess AG is cranking up its realignment plan with the €2.4-billion acquisition of US flame retardant and lubricant additives supplier Chemtura Corp., the German group announced 26 Sept.

Under the agreement, Chemtura shareholders will receive $33.50 per share in cash for each outstanding share of common stock held. This represents an 18.9-percent premium to the stock’s closing share price of $28.18 on 23 Sept.

The transaction is expected to close around mid-2017 subject to approval by Chemtura shareholders and regulatory authorities.

The deal marks Lanxess’ second major realignment move, following the 1 April launch of Arlanxeo – the 50/50 JV formed through its sale of a 50-percent stake in its synthetic rubber business to Saudi Aramco for €1 .2 billion.

As part of its 'New Lanxess' strategy, the German group also announced the acquisition of Chemours’ Clean and Disinfect business for around €210 million on 25 April.

Lanxess said it will finance the purchase of Chemtura mainly through senior and ‘hybrid’ bonds, as well as from existing liquidity.

Headquartered in Philadelphia, Pennsylvania, Chemtura has 20 sites in 11 countries and around 2,500 employees worldwide.

The company reports annual sales of around €1.5 billion, with profit pre exceptionals of €245 million.

Some 45 percent of Chemtura’s revenue is generated in North America. In addition to additives, Chemtura’s portfolio includes urethanes and organometallics.

“We are significantly building on our competitive positioning in medium-sized markets and increasing our presence in North America,” said Matthias Zachert, chairman of the board of management of Lanxess.

According to Lanxess, Chemtura’s two additive segments in addition with its Rhein Chemie Additives business unit (ADD) will form the company’s new performance additives segment once the transaction is closed.

“Chemtura holds a competitive position in industrial lubricant additives. Moreover, Chemtura manufactures the necessary precursors and intermediates,” said Dr Anno Borkowsky, head of Rhein Chemie Additives.

“Combined with our own additives portfolio, we will be a major supplier for industrial lubricants and will further strengthen our competitiveness through our integrated value chain,” he added.

Chemtura is also a supplier of bromine and brominated products, which according to Lanxess and is well positioned due to its backward integration.

“Flame retardant requirements continue to rise mainly due to the trend for energy-efficient construction,” said Borkowsky,

Chemtura’s urethane business, which supplies hot-cast prepolymers and for special, aqueous urethane dispersions and polyester polyols, will be integrated into Lanxess’ high performance materials segment.