Evonik is acquiring the Specialty & Coating Additives business (Performance Materials Division) of Air Products and Chemicals for 3.8 billion US dollars (approx. €3.5 billion). The transaction is intended to be completed by the end of the year. The planned acquisition remains subject to formal approvals from the relevant antitrust authorities.
According to Evonik, the additives business will be rapidly integrated into the growth segments Nutrition & Care and Resource Efficiency. The combined specialty & coating additives business has a turnover of around €3.5 billion and an attractive EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of more than 20 %.
With their products and their positions in the key global markets, Evonik and the newly acquired business are highly complementary. The two businesses serve three particularly attractive, rapidly growing core markets: coating and adhesive additives, high-value PU foam additives, and specialty surfactants for industrial and institutional cleaning. They target the same end customers, but with different and complementary products.
Geographically, Evonik and the acquired division also complement each other. While the focus of the Air Products’ business is on North America and Asia, Evonik is particularly strong in Europe.
By optimizing production/logistics, marketing/sales and administration, Evonik expects to generate cost synergies of 60 million US dollars per year. These should be fully realized by 2020 at the latest. In addition, Evonik expects to achieve revenue synergies by combining innovation activities, leveraging the respective client bases and product portfolios, and taking advantage of geographical adjacencies. In total, the deal is expected to generate annual synergies of 80 million US dollars.
The transaction is partly structured as an asset deal, which will lead to tax benefits which are typical for transactions of this nature. These benefits amount to a net present value of more than 500 million US dollars.