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Lanxess gets rid of specialty plastics

The Lanxess Chemical Group is moving forward with its restructuring by exiting its business using high-performance plastics for the automotive and electronics industries. MDax Group is bringing this line of business into a joint venture with Advent Holdings, which is simultaneously handling the engineering plastics business for Royal DSM Group in a multi-billion deal. “Lanxis is once again significantly less dependent on economic volatility,” CEO Matthias Zuckert said on Tuesday.

The Lanxess Chemical Group is moving forward with its restructuring by exiting its business using high-performance plastics for the automotive and electronics industries. MDax Group is bringing this line of business into a joint venture with Advent Holdings, which is simultaneously handling the engineering plastics business for Royal DSM Group in a multi-billion deal. “Lanxis is once again significantly less dependent on economic volatility,” CEO Matthias Zuckert said on Tuesday.

The new joint venture between Cologne and financial investor Advent will pay €3.7 billion for DSM’s engineering materials business. Lanxess also contributes the High Performance Materials (HPM) business unit to the new company. There has been speculation about such a deal for several months, because Lanxess has already transferred its own activities, which are similar to those of the DSM, to an independent company under the name HPM. This produces high performance plastics primarily for the automotive, electrical and electronics industries.

Lanxess’ business with 1,900 employees and most important location in Antwerp has annual sales of about 1.5 billion euros with EBITDA and special items of about 210 million euros, Lanxess announced. According to the information provided, the DSM division, which has 2,100 employees and a turnover of about 1.5 billion euros, also generates an operating margin of about 20 percent, which is about 300 million euros of absolute operating profit.

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Advent will own at least 60 percent of the new joint venture. In return, Lanxess will receive an initial payment of at least 1.1 billion euros and a stake of up to 40 percent. Completion is expected in the first half of 2023. Zackert wants to use the money to pay off debts. A stock buyback program is also being considered.

dpa

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