Germany: Specialty Chemicals Lanxess to Take Over IFF’s Microbial Control Business

Editor: Ahlam Rais

Lanxess has plans to acquire International Flavors & Fragrances’ (IFF) microbial control business. With this move, the company aims to become one of the largest suppliers of microbial control products in the world and also strengthen its speciality chemicals portfolio.

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Lanxess will pay around 1.3 billion dollars for IFF’s microbial control business.
Lanxess will pay around 1.3 billion dollars for IFF’s microbial control business.
(Source: Ulla Anne Giesen/Lanxess)

Cologne/Germany – Lanxess is taking another big step on its growth course: the specialty chemicals company intends to take over the microbial control business of the U.S. group International Flavors & Fragrances (IFF). Both companies signed a corresponding agreement on August 23, 2021.

IFF Microbial Control is one of the leading suppliers of antimicrobial active ingredients and formulations for material protection, preservatives and disinfectants. The products are used in a wide range of applications, particularly in personal care and household products, industrial water treatment as well as paints and coatings.

The transaction is still subject to approval by the relevant antitrust authorities. In addition, the business must first be carved out from the IFF Group. Lanxess therefore expects the transaction to be completed in the second quarter of 2022.

The IFF microbial control business represents sales of around 450 million dollars and Ebitda of approximately 100 million dollars. Within four years after the closing of the transaction, Lanxess expects synergies to add approximately 35 million dollars in Ebitda. The acquisition is expected to be earnings per share accretive already in the first fiscal year after closing.

Within four years after the closing of the transaction, Lanxess expects synergies to add approximately 35 million dollars in Ebitda.

“In 2021, all signs are pointing to growth. The acquisition of IFF Microbial Control is already the fourth this year and Lanxess’ second largest ever. The business fits ideally into our strategic direction – specialty chemicals with attractive margins, applications in a wide range of industries and with a global positioning. It will make Lanxess one of the world’s largest suppliers of microbial control products. At the same time, we are enhancing Consumer Protection to become the strongest segment in the Group and are once again taking Lanxess a decisive step forward in terms of profitability and stability,” said Matthias Zachert, Chairman of the Board of Management of Lanxess.

Lanxess will pay around 1.3 billion dollars for the acquisition. IFF Microbial Control employs around 270 people and operates two production facilities at its U.S. sites in St. Charles, Louisiana, and Institute, West Virginia. The business also maintains a large partner network with active ingredient manufacturers and formulators. Following completion of the acquisition, the business is to be integrated into Lanxess’ Material Protection Products business unit.

“Also thanks to acquisitions in recent years, we are already well positioned as microbial control solutions provider. With IFF’s microbial control business, we can now expand our portfolio of active ingredients, enabling us to offer our customers additional application-oriented solutions. In addition, we are strengthening our value chain,” said Michael Schäfer, head of the Material Protection Products business unit. “The business also gives us access to new technologies and enhances our regulatory position through additional registrations.”

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