LANXESS and Advent complete formation of engineering materials JV
Specialty chemicals company LANXESS, which is based in Cologne, Germany, and private equity investor Advent International based in Boston, Massachusetts, U.S.A., have completed the formation of their engineering materials joint venture effective April 1, 2023.
The new joint venture is the result of the combination of DSM’s Engineering Materials business and LANXESS’s former High Performance Materials business.
LANXESS holds about 40% of the joint venture, while Advent International owns the majority with about 60%.
LANXESS also received a cash payment of around EUR1.3 billion (USD1.41 billion) on March 31. LANXESS is using this mainly to reduce its debt and thus to strengthen its balance sheet.
As financial support for the joint venture, LANXESS will be providing a loan of EUR200 million (USD217.6 million) to the joint venture.
“With the new joint venture, we are forging a strong global player in the field of high-performance polymers. The portfolios, value chains and global positioning of the two businesses complement each other perfectly. With its innovative products, the joint venture will be able to play a key role in shaping future developments—for example in the field of electromobility. In Advent, we have a strong and reliable partner with profound experience in the chemical industry and our customer industries,” said LANXESS CEO Matthias Zachert when the JV was announced last year.
“Joining forces with LANXESS in this industry transforming transaction is a highlight for Advent as we have built a trusted, long standing relationship and share the highest mutual respect. Together we plan to bring the experience, deep sector know-how, and financial resources to make the joint venture a global success story for everyone involved. The combination of LANXESS’ High Performance Materials (HPM) and DSM Engineering Materials (DEM) creates a strong platform and brings together extensive expertise, resulting in the best opportunities for employees and more value for customers,” said Ronald Ayles, managing partner, Advent International, when the announcement was made.
The automotive industry is a focus customer sector for the new joint venture. Polymers are used, among other things, for lightweight elements in structural parts of vehicles, as well as in the interior, often replacing metal parts to reduce vehicle weight and therefore reduce CO2 emissions. An important growth area is electromobility, where polymers are used, for example, in the construction of battery and charging systems, electronic control systems and power electronics.
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