Lanxess buys Chemtura for US$2.7bn

GERMAN speciality chemicals company Lanxess has announced it will buy US chemical manufacturer Chemtura for around €2.4bn (US$2.7bn).

Lanxess intends to fund the purchase of the Pennsylvania-based company by using existing liquidity and issuing new debt. The deal is expected to close around mid-2017, subject to approval by Chemtura shareholders and regulatory approvals.

Lanxess said the merger will expand its flame retardant and lubricant additives businesses. The company plans to combine Chemtura’s two additive segments with its Rhein Chemie additives business unit (ADD), which produces additives and service products for plastics, rubber, lubricants and colorants production.

Chemtura’s additives businesses include lubricant additives and synthetic lubricants for industrial applications, such as in power generation and aviation, and brominated flame retardant additives, elemental bromine and further bromine derivatives. Lanxess said it is interested in the brominated flame retardant additives because of their high effectiveness, especially in the construction industry (for insulation) and in the electronics industry.

“Flame retardant requirements continue to rise mainly due to the trend for energy-efficient construction,” said Anno Borkowsky, head of ADD, adding: “With this acquisition, we will become a major global supplier of high performance flame retardant additives. In the future, we can offer our customers brominated and phosphorous-based products from one source.”

Lanxess also said the merger will allow them to enter the fields of urethane and organometallics. Chemtura’s urethane business provides components for special polyurethanes, which are used mainly in the construction, mining, oil/gas, sports and electronics industries. Lanxess said the urethanes business will be integrated into its High Performance Materials segment.

Chemtura’s organometallics are used as catalysts in polymer production and for synthesis of fine chemicals and pharmaceuticals. This business will be integrated into Lanxess’ Advanced Industrial Intermediates unit.

Lanxess expects to achieve €100m in synergies from the deal by 2020.

Earlier this month, Lanxess completed its acquisition of Chemours' Clean and Disinfect business for €210m.