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German Industry

Wacker sells a stake to Morgan Stanley; Degussa may be considering restructuring

by Patricia Short
December 12, 2005 | A version of this story appeared in Volume 83, Issue 50

Less than two weeks after Wacker-Chemie completed a transition from privately owned company to stock corporation, the German chemical maker has sold a stake in itself to Morgan Stanley, the U.S. investment bank.

Neither company is releasing details of the sale, although a Wacker spokesman points out that the founding Wacker family "retains the majority share" in the company. It was only in August that the family purchased the 44% stake in Wacker held by Sanofi-Aventis.

The alacrity of the Morgan Stanley investment opens up the possibility that the bank could manage an initial public offering of Wacker. CEO Peter-Alexander Wacker told employees earlier this year that an IPO was possible, and analysts are now predicting one in 2006.

Meanwhile, what one staffer calls "too many reports" are swirling around Degussa, Europe's largest specialty chemical producer. This is largely because the company is in the midst of three major studies of its operations and structure: an in-house look at its fine chemicals business, a study on boosting profitability by consultants McKinsey & Co., and a review of strategy and structure by Boston Consulting.

According to a leaked draft of the Boston Consulting study, Degussa should eliminate its second management tier and trim the number of its business units from the current 20. At the same time, observers suggest that Degussa's majority owner, German conglomerate RAG, wants to buy out fellow shareholder E.ON, an energy company. But RAG is financially constrained, the thinking goes, and would have to sell off some of Degussa to pay for the deal.


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