German specialty chemicals company Lanxess AG (ETR: LXS) has agreed to acquire the Clean and Disinfect business of US-based chemical company Chemours (NYSE: CC), for $230 million in cash. Chemours, “a $6 billion startup with 200 years of experience,”  was created from the DuPont (NYSE: DD) Performance Chemicals businesses, which were spun off on July 1, 2015.

Closing is expected in the second half of 2016. The transaction is subject to approval from relevant antitrust authorities.

The business comprises active ingredients as well as specialty chemicals used especially in disinfectant and hygiene solutions. One of its core products is the Virkon S branded disinfectant, that is being deployed globally in the growth sector of veterinary disinfection and in the combat against major diseases such as Foot-and-Mouth disease or Avian Influenza.

The new business will be integrated into Lanxess’ Material Protection Products business unit, with 350 employees at production sites in Krefeld-Uerdingen and Dormagen (Germany), Pittsburgh (USA), Jhagadia (India), Changzhou (China) and Singapore. It is part of the Performance Chemicals segment, which generated sales of roughly EUR 2.1 billion in 2015.

The acquisition will be earnings per share (EPS) accretive in the first fiscal year. The acquired business is expected to generate an annual EBITDA contribution of around EUR 20 million, which will increase gradually with synergy effects to roughly EUR 30 million by 2020.

The deal is Lanxess’ first acquisition after the completion of its realignment program. “We plan to enhance our position particularly in mid-sized, less cyclical markets with high margins and sound growth prospects,” said Lanxess chairman Matthias Zachert. “We have made quick headway and are now expanding our specialty chemicals portfolio which will make us more profitable and more resilient.”

“Today marks another important step in our five-point transformation plan,” said Mark Vergnano, Chemours president and CEO. “This agreement, along with the recent sale of our Beaumont aniline facility, illustrates the significant progress we are making to streamline our portfolio and improve our liquidity position.”

The Chemours‘ Clean and Disinfect business has 170 employees worldwide and three production sites in Memphis and North Kingstown, USA, and Sudbury, United Kingdom. In 2015, the business achieved sales of around EUR 100 million, roughly half of which in the region of North America. The product portfolio is organized into three primary categories: Disinfectants, Oxone and Chlorine Dioxide. Chemours will retain the Glycolic Acid business, based in Belle, W.Va., which was historically part of the Clean and Disinfect Business.

Barclays Capital Inc. is acting as financial advisor and Wachtell, Lipton, Rosen & Katz is acting as legal adviser to Chemours.

Lanxess is a leading specialty chemicals company with sales of EUR 7.9 billion in 2015 and about 16,200 employees in 29 countries. The company is currently represented at 52 production sites worldwide. The company’s core business is the development, manufacturing and marketing of chemical intermediates, specialty chemicals and plastics. Through Arlanxeo, a joint venture with Saudi Aramco, Lanxess is also a leading supplier of synthetic rubber. The company was founded in 2004 and is headquartered in Cologne, Germany.

The Chemours Company helps create a colorful, capable and cleaner world through the power of chemistry. Chemours is a global leader in titanium technologies, fluoroproducts and chemical solutions, providing its customers with solutions in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. Chemours ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing. Its flagship products include prominent brands such as Teflon, Ti-Pure, Krytox, Viton, Opteon and Nafion. Chemours has approximately 8,000 employees across 35 manufacturing sites serving more than 5,000 customers in North America, Latin America, Asia-Pacific and Europe. Chemours is headquartered in Wilmington, Delaware.

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