Evonik Industries AG is acquiring the specialty & coating additives business (Performance Materials Division) of U.S.-based Air Products and Chemicals, Inc. for USD 3.8 billion. Half of the outlay for the acquisition will be financed with the company’s own funds, the other half with additional debt. The planned acquisition remains subject to formal approvals from the relevant antitrust authorities.
The transaction is intended to be completed by the end of the year. It is expected that the acquisition will be EPS accretive for Evonik in the 2017 business year. In total, the deal is expected to generate annual synergies of USD 80 million.
The transaction is partly structured as an asset deal, which will lead to tax benefits which are typical for transactions of this nature. These benefits amount to a net present value of more than USD 500 million.
“Evonik is already one of the leading producers of specialty & coating additives. Air Products’ specialty & coating additives business perfectly complements this fast-growing segment. With this acquisition we are expanding our portfolio with precisely the right markets, products and innovations and continuing to invest in our growth and profitability,” said Klaus Engel, CEO of Evonik Industries AG.
With its own strategic reorganization and creation of three independent operational segments in 2015, Evonik established the right conditions for integrating major acquisitions. As such, Air Products’ specialty & coating additives business can be rapidly integrated into the growth segments nutrition & care and resource efficiency.
The combined specialty & coating additives business has a turnover of around EUR 3.5 billion (USD 3.9 billion) and an attractive EBITDA margin of more than 20%.
At the same time, Evonik is further strengthening its leading position in rapidly growing, highly profitable markets with strong differentiation from competitors and low dependence on commodity prices.