Lanxess to buy Chemtura in $2.7bn deal

German specialty chemicals group Lanxess rallied after announcing the acquisition of Philadelphia-based peer Chemtura in a $2.7bn deal.

Under the terms of the deal, Chemtura shareholders will receive $33.50 a share in cash for each of their shares, which is a premium of about 19% to the closing price on Friday.

Lanxess, which is the world’s largest synthetic rubber maker, said the deal will be financed through senior and hybrid bonds as well as from existing liquidity.

Lanxess chairman Matthias Zachert said: “With this acquisition, we are forming a champion in the field of additives and are strengthening our already profitable portfolio.

“Through the acquisition, we are further implementing our strategy to become a more resilient and profitable chemical company. We are significantly building on our competitive positioning in medium-sized markets and increasing our presence in North America. Lanxess is taking a next and major step forward on its growth path.”

The German group said the acquisition will be accretive to earnings per share in the first fiscal year, with annual synergies of about €100m expected by 2020.

Chemtura president and chief executive officer Craig A. Rogerson said: “The transaction provides premium value to our shareholders and benefits our customers and employees by making Chemtura part of a much larger, stronger global enterprise with the resources to fully support a more diverse suite of specialty chemicals products and services.”

At 0856 BST, Lanxess shares were up 7.2% to €52.29.