LANXESS will acquire IFF's microbial control business/Progress of Xinhecheng Methionine Project

LANXESS has taken another big step in its development process: this specialty chemicals company plans to acquire the microbial control business of the American International Flavour and Fragrance Company (IFF). The two companies signed the corresponding agreement on August 23, 2021. IFF's microbiological control department is one of the leading suppliers of antimicrobial active ingredients as well as material protection, preservatives and disinfectant formulations. These products are widely used, especially in the fields of personal care and household products, industrial water treatment, and paint coatings.

This transaction is still subject to the approval of the relevant antitrust authorities. In addition, the microbiological control business must first be spun off from the IFF Group. Therefore, LANXESS expects to complete the transaction in the second quarter of 2022.

The sales of IFF's microbiological control business are approximately US$450 million, and the profit before interest, tax, depreciation and amortization is approximately US$100 million. Within four years after the completion of the transaction, LANXESS expects that the synergy will bring about US$35 million (30 million euros) in EBITDA. The acquisition is expected to increase earnings per share within the first fiscal year after the completion of the transaction.

"In 2021, all signs point to growth. The acquisition of IFF's microbial control business is LANXESS’s fourth acquisition this year and the second largest acquisition in the company’s history. This business is very much in line with our strategic direction-high profits. , A wide range of applications, and a global positioning of specialty chemicals. This will make LANXESS one of the world's largest suppliers of microbial control products. At the same time, we are strengthening the consumer protection business segment to make it the strongest The business segment of LANXESS has once again made LANXESS take a decisive step forward in terms of profitability and stability,” said Chang Mutian, Chairman of the LANXESS Group Management Board.

LANXESS will pay approximately USD 1.3 billion (EUR 1.1 billion) for the acquisition. "Considering the synergies we hope to achieve, we have achieved an attractive purchase price-9.6 times EBITDA," said Peng Chengmai, chief financial officer of LANXESS. LANXESS will finance the purchase price with debt capital and has obtained corresponding bridge financing. Peng Chengmai said: "In the next few months, we will issue corporate bonds in the capital market to replace the bridge financing negotiated with banks. During this period, it is very important for us to maintain our reliable investment grade rating."

The perfect complement to the material protection business

IFF’s microbial control business has approximately 270 employees, and the St. Charles production site in Louisiana, USA, and the Institutot production site in West Virginia. The business also maintains a large network of partners with active ingredient manufacturers and formulators. After the completion of the acquisition, this business will be incorporated into LANXESS's material protection business unit.

"In addition, thanks to several acquisitions in recent years, we have become a well-positioned microbial control solution provider. With IFF's microbial control business, we can expand our active ingredient product portfolio and provide customers with more Multi-application-oriented solutions. In addition, we are strengthening our value chain," said Michael Sch, head of the material protection business unit? fer said. "The business also allows us to acquire new technologies and strengthen our regulatory position through more registrations."

IFF's microbial control business provides comprehensive innovative sustainable solutions. Its products can extend the life and function of end products such as paints, personal care products, detergents, household cleaners, etc., in addition to conserving water in industrial applications. The hygiene solutions provided by IFF's microbial control business are also used in functional textiles to ensure that these products remain sterile for a longer period of time.

Xinhecheng: The 150,000-ton production line of the company's 250,000-ton methionine project mainly carried out pre-construction preparations in the first half of the year

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On August 23, it was stated on the investor interaction platform that the company's 150,000-ton production line of the 250,000-ton methionine project mainly carried out pre-construction preparations in the first half of the year.

On August 23, it was stated on the investor interaction platform that the TMB project of Shandong Industrial Park mainly constructs vitamin B6 production lines and supporting facilities; Heilongjiang Biological Fermentation Phase II currently mainly constructs vitamin B12 and other product production lines.

An announcement was issued on the evening of August 23 stating that the repurchase amount ranged from 300 million yuan to 600 million yuan (including this figure), and the specific repurchase amount was subject to the total amount of funds actually used.

The 2021 semi-annual report shows that Xinhecheng’s main business is pharmaceutical and chemical and other industries, accounting for 93.17% and 6.83% of revenue respectively. Zhongtai Securities released a research report on August 23 to maintain Xinhecheng’s buy Rating. Zhongtai Securities predicts that Xinhecheng's net profit attributable to its parent will be 4.113 billion yuan in 2021, a year-on-year increase of 15.42%.