Lanxess and Advent buy DSM’s engineering business for $4 billion
Lanxess AG announced on Tuesday that it will partner with private equity firm Advent International Corp. to buy DSM from Royal DSM NV,
an engineering materials business for about 3.7 billion euros ($3.99 billion) and create a new business for high performance plastics.
The announcement came after Netherlands-based DSM announced on Tuesday that it would merge with Swiss fragrance company Firmenich SA to create a company with a market capitalization of 25 billion euros.
The DSM engineering-materials business, which would be part of the joint venture, represents sales of around €1.5 billion and an operating margin of around 20%, Lanxess LXS,
The German chemicals company said it would also transfer its own performance materials business to the joint venture, and would initially receive 1.1 billion euros and up to a 40% stake in the new venture.
Lanxess said it would use the proceeds to reduce debt and launch a €300 million share buyback program.
Advent will own at least 60% of the joint venture, Lanxess said.
The deal is expected to close in the first half of 2023, subject to regulatory approvals, Lanxess said.
Write to Ed Frankl at firstname.lastname@example.org