Lanxess to Acquire Chemtura for $2.69B

BioChemicals/Renewable Chemicals, Business News/Analysis, Canada, Funding/Financing/Investing, Germany

September 29, 2016

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by Jim Lane (Biofuels Digest) In Germany, Lanxess will acquire the US-based speciality chemical maker Chemtura, one of the major global providers of high-quality flame retardant and lubricant additives, for $2.69B, a 18.9% premium to the stock’s current share price. The transaction will be financed by LANXESS mainly through senior and hybrid bonds, as well as from existing liquidity. The transaction is expected to close around mid-2017.

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In February 2012, Lanxess invested $10M in BioAmber and joiend the company’s board. The companies had previously announced a joint development effort for succinic acid-based plasticizers that are both renewable and phthalate-free. BioAmber launched its first commercial succinic acid in Sarnia, Canada, located on a site within Lanxess’ Bio-industrial Park.

In the summer of 2013 Lanxess ran a production campaign of bio-based PBT in Lanxess’ world-scale production plant using 20 metric tons of bio-based BDO made with Genomatica’s commercially-proven process. The properties and the quality of the resulting bio-based PBT were fully equivalent to conventional petro-based PBT with regard to all tested parameters. The PBT plant, with a capacity of 80,000 tons per year, is located in Hamm-Uentrop, Germany and operated as a joint venture in which Lanxess has a share of 50 percent.

In Gevo’s 2011 IPO, the company highlighted an exclusive, 10-year deal to supply Lanxess with isobutylene and butenes for use and sale in the field of chemicals, produce butadiene and isobutylene for use in the production of polybutadiene and butyl rubber, and produce isobutylene for use in the production of polyisobutylene. But we have heard almost nothing about the offtake arranagement in recent years as Gevo’s attention focused in on marine and aviation fuels.

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In 2014, we reported that Lanxess launched a liquid stabilizer for biodiesel, called Baynox Extra. The additive prolongs the shelf life of biodiesel, even when it contains polyunsaturated fatty acids, at temperatures as low as minus 10 degrees Celsius, meaning that the antioxidant tank does not need to be heated. Baynox Ultra is typically added in a concentration of 200 to 500 ppm to the biodiesel. Since the stabilizer does not crystallize, it can be used reliably at temperatures as low as 20 degrees Fahrenheit.

In January 2015, we noted that Lanxess added two new highly concentrated antioxidants to Baynox Ultra, that effectively prolongs the shelf life of biodiesel, especially for soybean and sunflower methyl esters. It contains a balanced blend of highly active antioxidants and a chelating agent dissolved in a “green” solvent. READ MORE

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