Lanxess completes acquisition of Chemtura earlier than expected
All required regulatory authorities have cleared the transaction.
Largest acquisition in the history
Already in February 2017, Chemtura’s shareholders voted to approve the acquisition. With a total enterprise value of EUR2.4 billion, Chemtura is the largest acquisition in the history of Lanxess. The acquisition significantly expands the company’s additives portfolio and makes Lanxess one of the world’s leading players in this growth field, which is one of the most attractive in the specialty chemicals industry. In addition to additives, Chemtura’s urethanes and organometallics businesses will be integrated into the Lanxess portfolio. The Cologne-based specialty chemicals company will absorb some 2,500 Chemtura employees at 20 sites in 11 countries worldwide. The former Chemtura businesses generate annual sales of approximately EUR 1.5 billion.
Additional strong pillar
“The acquisition is another major step in our realignment process and a significant milestone in our course of growth. 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 AG. “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.”
Increased footprint in North America
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 region’s share in global sales increases from approximately 17 percent to approximately 21 percent. The expected annual synergy effects from the transaction amount to approximately EUR 100 million with realisation targeted until 2020.
New Specialty Additives segment
Effective immediately, Lanxess will combine its entire additives business within the new Specialty Additives segment. This segment is an additional pillar in the Lanxess group, with annual sales of approximately EUR 2 billion and some 2,900 employees worldwide. The segment comprises the new Additives and Rhein Chemie business units. The combined business with flame retardant and lubricant additives is anchored in the Additives business unit, which is headed up by Anno Borkowsky. The Rhein Chemie business unit, headed up by Philipp Junge, comprises the existing rubber and color additives businesses of Lanxess.
Growth rates of 3 to 4 percent
Lanxess is expanding its market position for flame retardant additives and now also operates the former Chemtura businesses with brominated flame retardant additives, bromine and bromine derivatives. Due to their high effectiveness, these substances are used among others in the construction industry and are an ideal complement for the existing business with phosphorus-based flame retardant additives. “Flame retardance requirements are continuously rising due particularly to the trend toward energy-efficient construction. This acquisition will also make us one of the world’s leading suppliers of flame retardant additives. As of today, we can offer our customers an array of complementary brominated and phosphorus-based products from a single source,” said Borkowsky. Lanxess also expects medium-term annual growth rates of 3 to 4 percent for the area of flame retardant additives.