Evonik's Takeover

Finding a U.S. Niche

Evonik CEO Klaus Engel Source Roland Weihrauch dpa 30209709
As other chemical firms, Evonik's chief executive Klaus Engel is looking to grow in niche markets.
  • Why it matters

    Why it matters

    Evonik and Lanxess’ acquisitions in the United States could help them grow revenue and profits and fend off competitors in the Persian Gulf and East Asia from lucrative niche markets.

  • Facts

    Facts

    • Evonik purchased the U.S. specialty chemicals operations from Air Products and Chemicals for €3.5 billion, or $3.8 billion.
    • The Essen-based chemicals firm can leverage high barriers to entry to shut out its competitors, a source told Handelsblatt.
    • Last month, rubber maker Lanxess announced the €210-million purchase of U.S. company Chemours, which produces highly specialized disinfectants and other products.
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    Audio

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It’s the largest acquisition in Evonik’s history.

For a price of €3.5 billion, or $3.8 billion, Germany’s second-largest chemicals firm agreed on Friday to buy the specialty chemicals operations from the U.S. industrial gas producer Air Products and Chemicals.

The deal is not a steal, even though it comes with €500 million in tax benefits. Essen-based Evonik is paying 15 times more than what the businesses it’s buying made in operational profits last year. The businesses being purchased had a combined revenue of $1.1 billion.

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