Lanxess to buy DSM's EPDM business for euro 310 million

ERJ staff report (DS)

Leverkusen, Germany - Lanxess AG has agreed in principle to buy DSM Elastomers for euro 310 million on a cash and debt-free basis. DSM NV has agreed to sell its DSM Elastomers business, which produces the synthetic rubber ethylene propylene diene monomer (EPDM) under the brand name Keltan.

The deal is subject to employee consultation and antitrust authorities. It is expected to close in the first few months of 2011 and will place Lanxess as the largest EPDM producer in the world with total capacity of some 320 000 tonnes/year. EPDM is currently in tight supply around the world.

Lanxess currently produces EPDM in Marl, Germany, and Orange, United States, with a combined annual capacity of 120,000 metric tons.

Sittard-Geleen-based DSM operates an EPDM plant in Sittard-Geleen, the Netherlands, with an annual production capacity of 160,000 metric tons. DSM's other EPDM plant is based in Triunfo, Brazil, with an annual capacity of 40,000 metric tons. Lanxess said it plans to base the headquarters of the combined EPDM businesses in Sittard-Geleen.

One of the key elements of the deal will be the construction of a new EPDM plant in the Asia-Pacific region. No plans for that project were revealed with the announcement, but the DSM sale document emphasised the need for more capacity in the world and specifically that region, while Lanxess has previously said it needs to add capacity in that part of the world.

DSM Elastomers has approximately 420 employees worldwide and is expected to achieve sales of about euro 380 million in 2010.

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Press release from Lanxess

Press release from DSM NV