Lanxess Completes Chemtura Takeover
Following all approvals, Cologne, Germany-based Lanxess has completed its acquisition of Chemtura, Phliadelphia-headquartered US specialty chemicals producer for €2.4 billion. The deal – originally expected to close in mid-2017 – was completed slightly ahead of schedule. The integration of assets worth €1.5 billion in annual sales will boost the German company’s turnover to €9.2 billion and at the same time boost its global workforce by 2,500 employees at 20 sites in 11 countries.
Going forward, Chemtura Corp – which grew out of the 2005 merger of US companies Great Lakes and Crompton – will be known as Lanxess Solutions U.S. Altogether, the German company expects to realize annual synergies of around €100 million through the integration of assets of the US additives specialist up to 2020.
The buy will considerably enhance Lanxess’ position in the “growth markets” of North America, said CEO Matthias Zachert. The number of its production sites in the three-country bloc has now doubled to 24, and the size of the workforce has almost doubled to 2,800 from 1,500. The region’s share of global sales has grown to about 21 %, up from 17%.
In particular the additives assets, which will be integrated into Lanxess’ German subsidiary Rheinchemie, will create considerable value, Zachert said. The deal also adds urethanes and organometallic activities to the Lanxess range, and new business units will be added to accommodate them.
According to local reports, the Chemtura takeover will also saddle Lanxess with environmental liabilities. One of them is a Canadian production site in Elmira, Ontario, which manufactures lubricant additives and synthetic lubricants for industrial applications. The plant was built in the 1940s by tiremaker Uniroyal, now part of Michelin. Discharge of chemicals such as DDT used at the site beginning at least in the 1960s led to soil and groundwater contamination and poisoned the town's water supply.
Cleanup efforts that have dragged on unsatisfactorily for decades are expected to continue until at least 2028, the final deadline mandated by the provincial government for completion of groundwater remediation, the newspaper Waterloo Record said. However, the paper quotes Chemtura officials as saying said computer models suggest that some contamination will persist southwest of the plant beyond 2028.