Evonik Strikes Deal For Carbon Black Unit

Seven months after putting it up for sale, Evonik Industries has agreed to sell its carbon black business to the private equity firm Rhône Capital. The deal, for more than $1.2 billion including the assumption of certain obligations, is expected to be complete this summer, in advance of an initial public offering (IPO) of Evonik stock.

With revenues of about $1.7 billion last year, Evonik's carbon black business is the world's third largest producer of the material, which is added to tires and other rubber goods to improve abrasion resistance. Evonik said last year that it wanted to sell the business to concentrate on operations with above-average growth potential.

"We are putting the business in good hands," says Klaus Engel, chairman of Evonik's executive board. "At the same time, this represents another major step toward a more clear-cut profile for Evonik as a leading specialty chemicals company when it goes public."

Evonik took steps toward an IPO in 2008 but put it on hold when the economic downturn hit. Evonik's main shareholder, the RAG Foundation, recently stated that it plans to carry out the IPO in the next 15 months. It says it will determine by this fall if the IPO can be executed by the end of the year.

Rhône Capital, founded in 1996, is no stranger to the chemical industry. From 2007 until last year it was the majority owner of Arizona Chemical, the former terpene chemicals arm of International Paper. It has also owned Almatis, the former Alcoa Specialty Chemicals business.