HOECHST / CLARIANT
Merger of masterbatch and pigment activities / Move to strengthen and expand business
In a surprise move, two leading players in the masterbatch industry have announced plans to combine their respective businesses in a deal which will create the world's leading supplier of specialty chemicals. Hoechst AG (D-65926 Frankfurt) and Clariant AG (Rothausstr. 61, CH-4132 Muttenz) have signed a general agreement whereby Hoechst will transfer its specialty chemicals business to Clariant while taking a significant minority shareholding in the newly expanded company. The businesses to be transferred include Hoechst's activities in masterbatch, pigments and additives, surfactants and auxiliaries. Also included will be the organic pigments business of Cookson Group PLC (130 Wood Street, GB-London EC2V 6EQ) which Hoechst has agreed to acquire for USD 19m.
This latest consolidation is a further example of how the large chemical combines in Germany and Switzerland are increasingly reorganising their businesses to focus on key areas. Clariant itself was created in 1995 from the chemicals division of former parent company Sandoz AG. Hoechst meanwhile has recently announced plans to put into a joint venture its PP and PE operations (see Plasteurope.com No. 21 and 20, 1996). This particular merger is Hoechst's reaction to the difficult business situation in these activities, especially in Europe where this sector has been underperforming. It includes some highly competitive and cyclical businesses which are coming under further pressure from increasing imports from Indian and Chinese producers. A further problem is that many of its customers are shifting production from Europe to Asia. Clearly the new company will be looking to realise significant cost savings and synergies which are likely to result in major rationalisation of production facilities. The aim is to achieve annual savings in the region of SFR 500m.
The move will undoubtedly create the largest masterbatch company in the world with estimated annual sales of DEM 650m. This represents about 10% of sales for the newly expanded group which are put at DEM 6.5bn. Both groups are specialised in higher-added value colour products and already have a global presence with extensive operations throughout Europe as well as plants in North and South America, Asia, Africa and Australia.
This latest consolidation is a further example of how the large chemical combines in Germany and Switzerland are increasingly reorganising their businesses to focus on key areas. Clariant itself was created in 1995 from the chemicals division of former parent company Sandoz AG. Hoechst meanwhile has recently announced plans to put into a joint venture its PP and PE operations (see Plasteurope.com No. 21 and 20, 1996). This particular merger is Hoechst's reaction to the difficult business situation in these activities, especially in Europe where this sector has been underperforming. It includes some highly competitive and cyclical businesses which are coming under further pressure from increasing imports from Indian and Chinese producers. A further problem is that many of its customers are shifting production from Europe to Asia. Clearly the new company will be looking to realise significant cost savings and synergies which are likely to result in major rationalisation of production facilities. The aim is to achieve annual savings in the region of SFR 500m.
The move will undoubtedly create the largest masterbatch company in the world with estimated annual sales of DEM 650m. This represents about 10% of sales for the newly expanded group which are put at DEM 6.5bn. Both groups are specialised in higher-added value colour products and already have a global presence with extensive operations throughout Europe as well as plants in North and South America, Asia, Africa and Australia.
31.12.1996 Plasteurope.com [19640]
Published on 31.12.1996