Süd-Chemie Acquisition Clariant Completes Acquisition of Süd-Chemie

Editor: Dominik Stephan

Speciality chemicals company Clariant initiated a squeeze out process of the remaining stock holders of Süd-Chemie, already owning shares of 98.64 percent in the German company. With this acquisition Clariant gains a foothold in the catalyst's business where Süd-Chemie has a strong expertise.

Dr. Müller, former head of Süd-Chemie's catalysts business will join Clariant's excecutive comitee. Müller will lead Clariant's new business units Catalysis & Energy and Functional Materials. (Picture: Süd-Chemie)
Dr. Müller, former head of Süd-Chemie's catalysts business will join Clariant's excecutive comitee. Müller will lead Clariant's new business units Catalysis & Energy and Functional Materials. (Picture: Süd-Chemie)

Muttenz/Switzerland – it's the showdown: Clariant aims to complete it's acquisition of Süd-Chemie by squeezing out the remaining stockholders of the German speciality chemicals firm and take the company private. With this acquisition Clariant could well become a major player in the global catalyst business at a single blow.

Clariant acquired a majority share in Süd-Chemie early this year from financial investor One Equity Partners (OEP) for over EUR 2 billion. After having a hard time restructuring the textiles and leathers business units this expansion is a first step towards new markets for Clariant. "Süd-Chemie will further drive our profitable growth forward in the coming years", said Clariant's CEO Hariolf Kottmann. "The acquisition also offers clear advantages for both companies as our investment will strengthen our research in future markets", he added. According to company officials, Clariant currently owns a share 98.64 percent in the German company.

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Süd-Chemie is mainly engaged in producing absorbents and catalysts. The company's history dates back to 1857 when it was founded as BAG by Justus Liebig. OEP acquired a majority of shares in Süd-Chemie with a hostile takeover in spring 2007.

Süd-Chemie with Good Figures for 2010

Süd-Chemie's provisional economic report for 2010 lists a total business volume of EUR 1.225 billion (EUR 153 million more than 2009). Under OEP ownership, Süd-Chemie invested large sums in research and development and founded start-up subsidiaries for bio-based ethanol fuels and lithium-iron phosphates for batteries. The company's latest coup was the formation of ASK, a global joint venture for foundry chemicals with American speciality chemicals company Ashland in December 2010.

Recent reports predict a solid growth driven by a strong commitment to emerging regions for the coming years. Süd-Chemie generates 85 percent of its sales volumes outside of Germany.

Clariant Expands Portfolio with Süd-Chemie's Catalyst Business

From Clariants point of view, the acquisition of Süd-Chemie shall help to expand Clariant's portfolio with fast growing and less cyclical business areas, said CEO Hariolf Kottmann in February. Wether Clariant is going to cut jobs with Süd-Chemie has not been decided yet. First plans by Clariant to purchase Süd-Chemie were published in spring 2011, after good figures in the last quarter of 2010.

Süd-Chemie's business shall be continued as separate divisions under Clariant's ownership, the company announced. Clariant expects savings around EUR 21 million (US $ 29,86) from synergistic effects, mainly in the administration, although both companies only have little overlapping.

Insiders expect Clariant to be especially interested in Süd-Chemie's strong catalysts segment - this acquisition would gain Clariant a strong foothold in the fast growing catalysts business.

Clariant Appoints Dr. Müller of Süd-Chemie to Lead New Catalysis & Energy Business

A strong hint for the importance of this topic is that Clariant until now only takes over one of Süd-Chemie's management personnel: Dr. Hans-Joachim Müller, former member of Süd-Chemie's managing board was recently appointed to lead Clariant's new established business units Catalysis & Energy and Functional Materials. Müller, born 1959, was head of Süd-Chemie's global business unit Catalytic Technologies, developing this business into a global market leading position. He holds a PhD in chemistry from the Ludwig-Maximilian-University in Munich, Germany.

Clariant's CEO Hariolf Kottmann commented: "I am pleased that Hans-Joachim Müller has accepted the offer to join the Executive Committee of Clariant. With his broad leadership experience in the chemicals industry and his deep understanding of the Süd-Chemie businesses he will guarantee for continuity and contribute to the successful execution of our profitable growth strategy."

Clariant expects the acquisition to generate profits by 2013. How the stock markets are going to react to these plans is still difficult to anticipate. Until now, investors remain reluctant: today the announcement lead to slight losses of 0.28 percent for Clariant shares (current value 13.56 Euro).

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