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USA: M&A in Silica Underway

Evonik Expands its Portfolio With Acquisition of Huber’s Silica Lines

| Editor: Dominik Stephan

“Huber Silica offers the opportunity to strategically develop Evonik’s portfolio,” said Klaus Engel, Chairman of the Group's Executive Board.
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“Huber Silica offers the opportunity to strategically develop Evonik’s portfolio,” said Klaus Engel, Chairman of the Group's Executive Board. (Source: andreas pohlmann/Evonik)

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Evonik strengthens its position in the growing Resource Efficiency market with the acquisition of the silica business of US company J.M. Huber. This US $ 630 million deal shall expand the product portfolio of the German specialty chemicals with customer specific solutions as well as contributing to their presence in overseas key markets.

Essen/Germany – Evonik Industries spends 630 million US dollars to buy the silica business of the US company J.M. Huber, expanding its position in the North American and Asian silica markets. “Huber Silica will significantly strengthen our growth segment Resource Efficiency,” said Klaus Engel, Chairman of the Executive Board of Evonik. “In addition, it offers the opportunity to strategically develop Evonik’s portfolio.”

“Silica has been part of Huber since the 1950s and paved the way for our company’s global expansion into engineered materials,” said Mike Marberry, President and Chief Executive Officer of Huber. “While it is difficult to part with a longstanding business, we see Evonik as an excellent strategic fit for both our silica customers and employees.”

Complimentary Product Lines

The silica market is characterized by its variety of applications and shows above-average annual growth of 4 to 6 percent. Huber’s business is especially oriented towards applications in the consumer goods industry, the dental sector for example. To date, Evonik’s silica business has been focused rather on industrial applications, for example in the tire and coatings industries.

“Combining the complementary silica businesses of Evonik and Huber will strengthen an important pillar of our portfolio,” explained Christian Kullmann, Executive Board Member for Strategy at Evonik. “Also, Huber Silica is an excellent regional fit with its focus on the U.S., China and India.”

20 Million in Synergies

For the 2016 financial year, Huber Silica is expected to achieve sales of close to 300 million US dollars and an EBITDA of 60 million US dollars. This corresponds to an attractive EBITDA margin of more than 20 percent.

Through the ideal complementarity of the two business areas, Evonik expects to generate synergies of 20 million US dollars, largely in the areas of production, logistics and procurement as well as through harmonization of the product portfolio. Evonik expects to have all synergy measures implemented by 2021.

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