Lanxess AG said Tuesday it would join private equity firm Advent International Corp. to Buy DSM from Royal DSM NV |
engineering materials business for about 3.7 billion euros ($ 3.99 billion) and create a new company for high-performance plastics.
The announcement came after DSM, based in the Netherlands, said on Tuesday that it would merge with Swiss fragrance company Firmenich SA to create a 25 billion-euro company with a market capitalization.
DSM’s engineering materials business, which would become part of the joint venture, represents sales of about 1.5 billion euros and an operating profit margin of 20%, Lanxess LXS,
dit.
The German chemical company said it would also transfer its own high-performance materials business to the joint venture and initially receive 1.1 billion euros and a stake of up to 40% in the new business.
Lanxess said it would use the proceeds to reduce debt and launch a € 300 million share buyback program.
Advent will own at least 60 percent of the joint venture, Lanxess said.
The deal is expected to close in the first half of 2023, subject to approval by authorities, Lanxess said.
Write to Ed Frankl at edward.frankl@dowjones.com