6.7 billion yuan! LANXESS completes the second large-scale acquisition in history

On August 4, LANXESS announced that it had completed the acquisition of Emerald Kalama Chemical. LANXESS signed an acquisition agreement on February 14, 2021, and has now obtained all required regulatory approvals. LANXESS provided approximately US$1.04 billion (approximately RMB 6.7 billion) in acquisition funds from working capital. China and foreign paint network noted that this is the second largest acquisition transaction in LANXESS history.

Headquartered in the United States, Emerald Kalama Chemical is a leading global manufacturer of specialty chemicals, especially in the consumer sector. In 2020, Emerald Kalama Chemical's global sales will be approximately 425 million U.S. dollars, and EBITDA will be approximately 90 million U.S. dollars. In the next three years, LANXESS expects that the synergy will contribute approximately US$30 million in earnings before interest, taxes, depreciation and amortization. Earnings per share (EPS) increase will be realized within the first fiscal year after the completion of the acquisition.

With the completion of the transaction, LANXESS added approximately 470 employees and added three new production sites in Kalama, Washington (USA), Rotterdam (Netherlands) and Widnes (UK).

"Emerald Kalama Chemical provides another major impetus to our development path. The new business perfectly fits our strategy. We are consolidating LANXESS’s position in the high-growth market and exploring new high-profit applications, especially It is in the beverage and food industry or cleaning products and cosmetics. In addition, Emerald Kalama Chemical is fully backward integrated, strengthening our value chain in the consumer protection business segment. The consumer protection business segment has thus become an improvement in the stability and stability of LANXESS. An important engine for profitability," said Chang Mutian, Chairman of the LANXESS Management Board. "A strong team is going all out to ensure that the company integration is completed quickly."

It is worth noting that this is the second-largest acquisition transaction in LANXESS' history. This transaction is second only to that. In April 2017, LANXESS completed the acquisition of Chemtura, one of the world’s leading suppliers of flame retardants and lubricant additives, for EUR 2.4 billion. This is a historical record of LANXESS. The largest acquisition transaction.

It is reported that 75% of Emerald Kalama Chemical's sales come from the sale of special products such as spices, flavors, food, daily necessities, and cosmetics, and the remaining 25% of sales come from the business of industrial special chemicals, including the plastics and adhesive industries.

Through this acquisition, LANXESS will expand its product portfolio in a targeted manner. Approximately three-quarters of the sales of the acquired business will be attributed to special products for the consumer healthcare industry, which will help make LANXESS one of the leading suppliers of flavors and fragrances. LANXESS is incorporating this business into its newly established flavors and fragrances business unit, which will be part of the consumer protection business segment.

The acquisition will also consolidate LANXESS' leading position in the preservatives business. The new products will be used in high-growth applications in the food and beverage industry as well as detergents, fabric softeners, cosmetics and personal care products. Approximately one-quarter of the sales of the acquired business comes from specialty chemicals for high-growth industrial applications such as plastics, paints and adhesives. These products will be incorporated into the polymer additives business unit.