Covestro acquires DSM's resins and functional materials business

Recently, Covestro, one of the world's largest polymer producers, signed an agreement with the Dutch Royal DSM Group, agreeing to acquire its resin and functional materials business (RFM) for 1.61 billion euros (approximately US$1.886 billion). The transaction is expected to be completed in the first quarter of 2021, and requires regulatory approval, including antitrust licenses.

It is reported that this transaction includes the entire business of DSM Resin and Functional Materials Division, including DSM-Niaga®, DSM Additive Manufacturing and DSM Advanced Solar's coatings business. The net sales of these businesses in 2019 were 1.012 billion euros, and the profit before tax, interest, depreciation and amortization was 133 million euros.

Covestro stated that the acquisition has diversified Covestro’s business scope and significantly strengthened the company’s position in an attractive and high-growth market. For example, Covestro will become one of the leading suppliers in the field of optical fiber coatings, which is a market with huge future potential. Application areas include future 5G technology; Covestro will also further expand the attractiveness of 3D printing materials. The market’s average annual growth rate exceeds 20%. In addition, by optimizing and combining the global business layout of both parties, Covestro will further narrow the distance with customers in all important markets, and its global production network will also add more than 20 bases.

Covestro predicts that by 2025, after full integration is completed, the value created by long-term synergy is expected to reach approximately 120 million euros per year.