Wacker to acquire full ownership of Air Products

15 Dec '07

4 min read

Wacker Chemie AG plans to acquire full ownership of Air Products Polymers (APP) and Wacker Polymer Systems (WPS), its two joint ventures with Air Products and Chemicals, Inc. The two partners announced they have signed an agreement to this effect.

As the world's leading supplier of dispersible polymer powders for construction applications, WACKER expects that the acquisition will provide strategic advantages to its global construction-polymers business. Benefits include synergies and cost advantages stemming from backward integration at U.S. and Asian dispersion plants, as well as the expansion of its supply chain outside the eurozone.

The closing of the transaction, which is subject to approval by the relevant antitrust authorities, is expected in Q1 2008. As part of the agreement, WACKER retains the Vinyl Acetate Ethylene (VAE) activities of the Joint Venture, while Air Products will receive full ownership in the Elkton, Md., and Piedmont, S.C., production facilities and their related businesses plus cash considerations of USD 265 million. With approval, the transaction would contribute substantially to further develop WACKER's polymer business to around €1 billion in sales in 2008.

Air Products issued a formal statement back in March 2006, announcing its intention to sell its APP and WPS shareholdings. Currently, WACKER owns 35 percent and Air Products 65 percent of APP. As for WPS, WACKER holds 80 percent and Air Products, 20 percent.

The planned acquisition focuses on the activities of APP and WPS in vinyl acetate ethylene-based dispersions and dispersible polymer powders. Consequently, WACKER plans to acquire all of the two companies' related activities at their APP and WPS sites in Allentown (PA, USA), Calvert City (KY, USA), Cologne and Burghausen (Germany), South Brunswick (NJ, USA) and Ulsan (Korea). WACKER intends to continue operating this business out of the Lehigh Valley. The Elkton (MD, USA) and Piedmont (SC, USA) sites and the associated businesses will become fully owned by Air Products.

Wacker Chemie AG's CEO, Peter-Alexander Wacker, saw the acquisition as another logical step in the Group's growth strategy. “WACKER and Air Products have worked together for over 20 years successfully developing the polymers market. This is a very capable and knowledgeable team,” he said.

“Our agreement will give WACKER fully integrated production sites in the USA and Asia. The economies of scale and synergies resulting from this extension of our value chain will bring us cost advantages. By boosting WACKER's polymer sales, the agreement reinforces the balance of our entire business portfolio. We will push ahead now with APP's and WPS's integration into WACKER Group.”

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