24th January 2019

EVONIK BUYS AIR PRODUCTS SPECIALTY AND COATINGS ADDITIVES

Evonik Industries AG is acquiring the Specialty & Coating Additives business (Performance Materials Division) of  Air Products and Chemicals, Inc. for US $3.8-billion, strengthening its position in the specialty and coating additives market. Subject to regulatory approval, the transaction should be completed by the end of 2016.
Klaus Engel, CEO of Evonik Industries AG, said: “Evonik is already one of the leading producers of specialty and coating additives. Air Products’ Specialty & Coating Additives business perfectly complements this fast-growing segment. With this acquisition we are expanding our portfolio with precisely the right markets, products and innovations and continuing to invest in our growth and profitability.”  
Following its own strategic reorganization, and creation of three independent operational segments in 2015, Evonik established the conditions for integrating major acquisitions. As such, Engel said, the Air Products business can be rapidly integrated into the growth segments nutrition and care, and resource efficiency.

The combined specialty and coating additives business has a turnover of around €3.5 billion and an EBITDA margin of more than 20 percent. At the same time, Evonik is further strengthening its position in rapidly growing, highly profitable markets with strong differentiation from competitors and low dependence on commodity prices.   
The two companies target the same customers, but with different and complementary products. For instance, Evonik is a leader in PU foam stabilizers while the Specialty and Coating Additives business of Air Products is well positioned in PU foam catalysts. Demand for these products is rising strongly, and the market for these additives is expected to grow more quickly than overall demand for chemical 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. With the current acquisition, Evonik boosts its standing in North America, and at the same time, by growing in North America and Asia, reduces its dependence on the European market, thereby better protecting against economic fluctuations in individual regions.
By optimizing production/logistics, marketing/sales and administration, Evonik expects to generate cost synergies of $60-million 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.   
www.evonik.com