Lanxess and Advent International establish a joint venture for high-performance plastics
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| LANXESS will contribute its High Performance Materials (HPM) business unit to the new joint venture |
Specialty chemicals company LANXESS and Advent International (“Advent”) are establishing a joint venture for high-performance engineering polymers. The two companies signed an agreement to acquire the DSM Engineering Materials business (DEM) from Dutch group Royal DSM, which will become part of the new joint venture. The purchase price is around EUR 3.7 billion and will be financed by the joint venture via equity from Advent and external debt.
In addition, LANXESS will contribute its High Performance Materials (HPM) business unit to the joint venture. HPM is one of the leading suppliers of high-performance polymers, which are used primarily in the automotive industry. The business represents annual sales of around EUR 1.5 billion.
This move further sharpens LANXESS’ business portfolio, which will consist of three specialty chemicals segments once the transaction is completed. LANXESS will use the proceeds of the transaction to reduce debt and to strengthen its balance sheet.
The transaction is still subject to approval by the authorities. Closing is expected in the first half of 2023.
LANXESS CEO Matthias Zachert: “LANXESS will once again become significantly less dependent on economic fluctuations. In addition, we as LANXESS will strengthen our balance sheet with the proceeds from the transaction and gain new scope for the further development of our Group. 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.”
Ronald Ayles, Managing Partner at Advent International: “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.”
