Germany’s specialty chemicals company LANXESS has agreed to acquire U.S.-based specialty chemicals company Chemtura Corporation. A combination of both companies would materially expand LANXESS’ business activities in additives for lubricants and flame retardants. The acquisition adds EUR1.5 billion (USD1.6 billion) in sales to Lanxess’s current additives unit, which has EUR850 million (USD953.8 million) in revenues.
Chemtura is one of the major global providers of high-quality flame retardant- and lubricant additives. LANXESS is offering an all cash consideration of USD33.50 per share, which represents a 19% premium over the closing price on Sept. 23 of USD28.18.
LANXESS has secured bridge financing for the transaction, which has an enterprise value of around EUR2.4 billion (USD2.7 billion). The bridge financing will quickly be refinanced via senior bonds and a hybrid bond. Furthermore, LANXESS will use existing liquidity to partly finance the acquisition.
Closing is subject to approval by Chemtura shareholders, any required regulatory approvals and certain other customary closing conditions. Closing of the transaction is anticipated in mid-2017.
Chemtura employs worldwide approximately 2,500 employees and has 20 sites in 11 countries. The company’s headquarters are in Philadelphia, Penn. The stock market listed company reported sales of around EUR1.5 billion (USD1.6 billion) in the last four quarters and EBITDA pre-exceptionals of approximately EUR245 million (USD274.9 million). Around 45% of its turnover is generated in North America. In addition to additives, the portfolio is also comprised of urethanes and organometallics.
LANXESS said in light of this acquisition, it will no longer pursue the announced share buy-back of around EUR200 million (USD224.4 million).