Lanxess AG said it would buy specialty chemical company Chemtura for about $2.7 billion in cash to improve the German company’s additives business.
Specialty chemical company Lanxess AG has said in a statement it is buying Chemtura Corp. in a deal with an enterprise value of around €2.4 billion ($2.7 billion). According to the specialty chemical company combining the two companies would expand its business activities in additives for lubricants and flame retardants. Lanxess said the value of the deal works out to about $33.50 per share of Chemtura. That represents an 18.9% premium to the stock’s closing share price of $28.18, Chemtura said.
Lanxess, based in Cologne, Germany, intends to fund the deal using existing liquidity and issuing new debt. The company said it has secured bridge financing, which will quickly be refinanced via senior bonds and a hybrid bond. The deal is expected to close around mid-2017. Lanxess also said its announced share buyback of around €200 million won’t be pursued further.
Craig A. Rogerson, CEO of Philadelphia-based Chemtura, said that
“The deal provides premium value to our shareholders and benefits our customers and employees by making Chemtura part of a larger, stronger global enterprise.”
Lanxess CEO Matthias Zachert added that:
“With this acquisition, we are forming a major global player in the field of additives and are significantly strengthening our already profitable portfolio.”