Clariant To Buy Süd-Chemie

Continuing to redefine itself after two years of restructuring, Switzerland’s Clariant has bid $2.6 billion to acquire German specialty chemical maker Süd-Chemie. The Swiss firm has secured agreements for the deal with owners that hold more than 95% of Süd-Chemie shares.

News of the purchase took center stage at Clariant’s 2010 results press conference in Zurich last week, eclipsing boasts about a turnaround in financial performance. Clariant reported 8% sales growth in 2010 to $7.6 billion and full-year net income of $204 million, which beat analyst estimates by nearly 20%.

Declaring the 2009–10 restructuring effort complete, Clariant CEO Hariolf Kottmann said the acquisition is “an exciting first step to grow our company from the solid base we created in the last two years.” Assuming regulatory approvals proceed smoothly, the deal could close by midyear.

Kottmann stressed that Süd-Chemie’s two main businesses offer high-margin opportunities in markets outside Clariant’s current scope and that its strong R&D programs will quickly boost the innovation platform that Clariant is building (C&EN, Feb. 14, page 20). Süd-Chemie’s preliminary 2010 results show adjusted earnings of $131 million on sales of $1.7 billion, split between its adsorbents (59%) and catalysts (41%) businesses. The two divisions will expand Clariant to a total of 12 business units when the deal is complete, Kottmann said.

Süd-Chemie’s biggest shareholder is JPMorgan Chase’s One Equity Partners arm, which bought into the company in 2005 and has owned 50.4% of it since 2007. Süd-Chemie says it learned last fall that OEP was reviewing exit options because it had reached the end of its expected five-year ownership period. OEP cashed out of carbon black producer Columbian Chemicals for $875 million last month.

Clariant has a rocky history with acquisitions, notably with its ill-fated 2000 purchase of pharmaceutical chemical company BTP for $1.8 billion. Still, Markus Mayer, European chemical analyst at UniCredit, takes a positive view of the new deal, highlighting the high-margin opportunities in Süd-Chemie’s portfolio. “The deal makes sense for the long-term prospects of the company,” he told clients in a research note.