LANXESS AG — M&A Activity 2010

Dec 14, 2010

News Details

Ad-hoc | 14 December 2010 07:14

LANXESS AG: LANXESS to acquire DSM Elastomers

LANXESS AG / Key word(s): Acquisition

14.12.2010 07:14

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Leverkusen - LANXESS and Dutch company Royal DSM N.V. have reached an
agreement in principle involving the sale of DSM Elastomers to LANXESS for
EUR 310 million on a cash and debt-free basis. DSM Elastomers produces the
synthetic rubber ethylene propylene diene monomer (EPDM) under the brand
name Keltan.

The price for the DSM Elastomers business represents an EBITDA multiple of
roughly 6 based on the expected EBITDA of 2010. The acquisition will be
financed by LANXESS out of existing liquidity and is expected to be EPS
accretive as of 2011.

The transaction contracts will be finalized once a consultation process
with the employees' representatives of DSM in the Netherlands has been
completed. The transaction is subject to approval from antitrust
authorities. Closing is expected in the first months of 2011.

Sittard-Geleen-based DSM Elastomers has approximately 420 employees
worldwide and is expected to achieve sales of about EUR 380 million in
2010. DSM operates an EPDM plant in Sittard-Geleen, the Netherlands, with
an annual production capacity of 160,000 metric tons. DSM's other EPDM
plant is based in Triunfo, Brazil, with an annual capacity of 40,000 metric
tons. LANXESS plans to base the headquarters of the combined EPDM
businesses in Sittard-Geleen.

LANXESS' Technical Rubber Products business unit (TRP) sells EPDM under the
brand name Buna EP. LANXESS produces EPDM in Marl, Germany, and Orange,
United States, with a combined annual capacity of 120,000 metric tons.

The global rubber market for ethylene propylene diene monomer (EPDM) is
expected to show single-digit percentage growth per annum in the next ten
years, driven by rising demand in China and Brazil.

Through the transaction, LANXESS plans to strengthen its technology base by
gaining access to the ACE technology. DSM is in the process of implementing
this technology on a larger scale at its site in Sittard-Geleen. In
comparison to conventional technology, ACE reduces the energy and
production costs for EPDM and at the same time broadens the application
possibilities of the rubber. LANXESS will evaluate implementing ACE
technology into its existing plants.

EPDM is used above all in the automobile industry but also in the plastics
modification, cable and wire, construction and oil additives industries.
Its properties include very low density, good resistance to heat,
oxidation, chemicals and weathering as well as good electrical insulation
properties.

Leverkusen, December 14, 2010

Forward-Looking Statements
This news release may contain forward-looking statements based on current
assumptions and forecasts made by LANXESS AG management. Various known and
unknown risks, uncertainties and other factors could lead to material
differences between the actual future results, financial situation,
development or performance of the company and the estimates given here. The
company assumes no liability whatsoever to update these forward-looking
statements or to conform them to future events or developments.

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Language: English
Company: LANXESS AG
Gebäude K10
51369 Leverkusen
Deutschland
Phone: +49 (0)214 30 33333
Fax: +49 (0)214 30 40 944
E-mail: ir@lanxess.com
Internet: www.lanxess.com
ISIN: DE0005470405
WKN: 547040
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart;
Terminbörse EUREX

End of Announcement DGAP News-Service

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