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LANXESS underpins BRIC strategy with two acquisitions in Asia

09
Jun '09
The subsidiary of specialty chemicals group LANXESS AG, LANXESS India Private Ltd., will acquire the chemical businesses and assets of stock-market-listed Indian company Gwalior Chemical Industries Ltd. for EUR 82.4 million, including debt. A corresponding agreement was reached with the company. The transaction is subject to formal approval by Gwalior's shareholders and clearance by the relevant antitrust authorities. Closing is expected at the end of the third quarter of 2009.

“This is our first acquisition in India and a further milestone in our company's long-term growth strategy in BRIC countries,” said Axel C. Heitmann, Chairman of LANXESS' Board of Management. “Gwalior's business complements the portfolio of the Basic Chemicals business unit and will strengthen our production base in the exciting Indian market.”

Founded in 1978, Gwalior's headquarter is based in Mumbai and employs about 400 permanent staff. In the first nine months of its business year 2008/2009 (end March 31), Gwalior achieved sales of approximately EUR 45.7 million and an above-peer EBITDA margin of approximately 18%.

“We are delighted to have reached this landmark transaction. We are convinced that the business as well as employees will go from strength to strength under the new management of LANXESS,” said Ashwin Kothari, Chairman of Gwalior Chemical Industries Ltd.

Gwalior is one of the largest Indian producers of benzyl products and one of the leading global producers of sulphur chlorides for the agrochemicals, pharmaceutical as well as flavor and fragrance industries. Its production sites are in Nagda, Madhya Pradesh state, and in Ankleshwar, Gujarat state. In the future, production will be concentrated at the modern Nagda site, which is currently expanding capacities.

In addition to the acquisition of Gwalior, LANXESS announced the takeover of the business and production assets of Jiangsu Polyols Chemical Co. Ltd. Both parties have agreed not to disclose the purchase price. Closing is expected in the third quarter of 2009. Jiangsu Polyols achieved sales of about EUR 10 million in 2008 and currently employs some 170 staff at a facility with competitive technology.

The Chinese medium-sized company mainly produces trimethylolpropane (TMP) that is used in lubricants, paints and coatings. LANXESS' business unit Basic Chemicals is already a major supplier of TMP in China and will integrate Jiangsu into its global operations.

With some 1,000 employees worldwide, the LANXESS Basic Chemicals business unit is one of the leading manufacturers of raw materials for agrochemicals, polymers, surface coatings and pigments. It operates several production sites in Germany, China and the United States. The Basic Chemicals business unit belongs to the Advanced Intermediates segment, which achieved total sales in 2008 of EUR 1.3 billion. The segment has proven to be one of LANXESS' more stable businesses in the economic crisis due to its exposure to the agrochemical industry.


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