Potential Sale on the Horizon for the Chemical Industry
Two very large European chemical firms are rumoured to be considering joining forces. Air Products and Chemicals, the US industrial gas producer, is reportedly in advanced talks to sell the performance materials section of its business to the German company Evonik Industries AG, a source has informed international news agency Reuters. This is great news for the businesses involved, for executives in the chemical industry and of course for chemical industry headhunters who will hopefully soon have plenty of new positions to fill.
Sun Cream and Paint
Air Products and Chemicals makes ingredients for sun cream and paint, among other products, and a $3.5 billion valuation is not unrealistic, the source claimed. In recent months, Evonik has been actively searching for larger acquisitions, hoping for a deal which would both support its future growth and help it to become less dependent upon the animal feed business.
Pennsylvania-based company Air Chemicals and Products announced last year that it would be hoping to spin off the materials technologies section of its operations into a publicly traded company. Now it appears that Evonik’s interest has come at exactly the right time.
Evonik is not just interested in Air Products and Chemicals, however. It is also reported to have shown an interest in Akzo Nobel, a speciality chemicals business whose sales are calculated at 1.9 billion euros annually. This interest was reported in the German weekly Wirtschaftswoche. They said that apparently Evonik were aiming to complete a deal by May 18th this year, when they hold their annual shareholders’ meeting.
Big Bucks – Or Euros
Patrick Raifasz, an analyst with UBS, said that he believed Evonik was looking to acquire chemistry targets which were both less cyclical and asset-light, such as Versum Performance Materials. He went on to say that he believed that Evonik would not need to tap into equity markets to finance the potential deal, as it has a net cash position amounting to 947 million euros, in addition to annual earnings in excess of two billion euros. A separate source also told Reuters that Evonik was very interested in Air Products and Chemicals’ company but that as of yet no firm decision had been reached.
Evonik themselves have so far had no comment to make on the possible acquisition, and at Air Products and Chemicals no one was available to comment outside of US business hours. Akzo Nobel, the other firm in which Evonik has shown an interest, says that all three of its business areas, Decorative Paints, Performance Coatings & Speciality Chemicals, are equally important to it right now.
Air Products and Chemicals said that its material technologies section in which Evonik are interested had sales of $2.087 billion in 2015.
Clearly, this kind of deal would have very positive effect in the European chemical industry and is of particular interest to executives looking for a new position. Chemical industry recruitment is on the rise, but chemical industry headhunters would be keen to find the right people to fill roles in management across the two companies. Executive search experts are already considering the possibilities.