The global chemical M&A transaction structure is becoming flexible

Federico Menera, Rothschild's global head of chemicals and materials, recently said that the structure of chemical M&A transactions will become more flexible
.

Rothschild Bank acted as a consultant on the joint acquisition of DSM Engineering Materials by LANXESS and private equity firm Asunair Capital for a purchase price of 3.
7 billion euros (about 25.
55 billion yuan).

As part of the transaction, LANXESS AG also merged its Performance Materials business with DSM Engineering Materials to acquire a 40% stake
in the combined company for EUR 1.
1 billion.
Three years after the closing of the transaction, LANXESS will have the option to sell its stake in the joint venture to Anhong Capital
.

In January, Clariant sold its pigments business to the Humbach Group and SK Capital
for CHF 805 million.
Clariant also invested CHF 115 million to retain a 20% stake
in the combined pigments business.
Menera noted that under this deal structure, the seller retains a minority stake and avoids losing the opportunity to
share dividends when new owners achieve operational synergies and significantly improve performance.

Menera noted that geopolitical tensions and economic uncertainty have affected chemical M&A deals
.
While borrowing costs are rising and the economic outlook is deteriorating, M&A deals continue
.

In May, SK Capital acquired Valtris Specialty Chemicals
, a U.
S.
manufacturer of specialty polymer additives.
In June, Johnson Matthey announced the sale of its active pharmaceutical ingredient business to Altaris Capital for £325 million
.
In July, Hopewell completed the sale of a majority stake in its performance technology and industrial chemicals business to a subsidiary of Cargill Corporation of the United States
.