Germany: Business Deal Lanxess to Exit Organic Leather Chemicals Business
Under the terms of the agreement, Lanxess will sell its organic leather chemicals business to the global supplier of leather chemicals, TFL Ledertechnik. With this deal, TFL is also expected to assume certain liabilities linked with the business.
Cologne/Germany – Lanxess is selling its organic leather chemicals business to TFL Ledertechnik. TFL is a global supplier of leather chemicals and a portfolio company of US investment company Black Diamond Capital Management. Both companies signed an agreement to this effect on August 12, 2020. The purchase price comprises a fixed component of 95 million dollars (80 million Euros) and a performance-related component of up to 136 million dollars (115 million Euros). In addition, TFL will assume certain liabilities associated with the business. The transaction is still subject to the approval of the relevant authorities. Lanxess expects the transaction to close around mid-2021.
“We are convinced that the transfer to TFL will open up new growth and development prospects for the business and will thus significantly strengthen it,” said Matthias Zachert, Chairman of the Board of Management of Lanxess. “At the same time, we are making Lanxess somewhat more independent from the automotive industry, a key target industry for leather products.”
Tanneries use organic leather chemicals in all stages of leather production. Lanxess manufactures the products in Leverkusen (Germany), Filago (Italy), and Changzhou (China). This is complemented by application-oriented laboratories and sales offices around the world. TFL will take over all operations of the organic leather chemicals business line from Lanxess with a total of around 460 employees. In 2019, Lanxess generated sales in the lower three-digit million dollar range with the business.
With the sale, Lanxess is withdrawing completely from leather chemicals. The specialty chemicals firm had already divested its chrome chemicals business, as well as its stake in the South African chrome ore mine (transaction expected to be completed by the end of 2020). Lanxess has been reporting the Leather business unit as a discontinued operation since the end of last year.