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Lanxess to acquire DSM Elastomers

By Gerald Ondrey |

Lanxess AG (Leverkusen, Germany; www.lanxess.com) and Dutch company Royal DSM N.V. (Heerlen, the Netherlands; www.dsm.com) have reached an agreement in principle involving the sale of DSM Elastomers to Lanxess for €310 million on a cash and debt-free basis. DSM Elastomers produces the synthetic rubber ethylene propylene diene monomer (EPDM) under the brand name Keltan.  The price for the DSM Elastomers business represents an EBITDA multiple of roughly six based on the expected EBITDA of 2010. The acquisition will be financed by Lanxess out of existing liquidity and is expected to be EPS accretive as of 2011. The transaction contracts will be finalized once a consultation process with the employees’ representatives of DSM in the Netherlands has been completed. The transaction is subject to approval from antitrust authorities. Closing is expected in the first months of 2011. “We look forward to welcoming DSM’s professional EPDM team as well as its impressive assets to our core synthetic rubber activities,” says Axel C. Heitmann, Lanxess CEO. “The transaction will also be an important step towards our goal of achieving roughly €1.4 billion EBITDA pre exceptionals in 2015.” Feike…
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