US chemicals group Huntsman is acquiring five businesses – including titanium dioxide, colour pigments and plastic compounding – from Rockwood Holdings in a deal valued at $1.325bn (£0.8bn).The consideration comprises $1.1bn (£0.7bn) in cash and $225m (£141.5m) in unfunded pension liabilities, officials with Texas-based Huntsman said in a statement.
The acquisition, the company’s largest since it paid $2.8bn (£1.74bn) to buy four businesses from ICI in 1999, “provides a unique opportunity to unlock value within our pigments business and builds on the strong improvements we have made to its competitiveness”, president and chief executive Peter Huntsman said.Rockwood, a New Jersey-based chemicals and materials group, had defined the five businesses as “non-strategic,” officials said in statement. Earlier this year, the firm had sold its advanced ceramics and clay-based additives units in deals totalling more than $2bn (£1.3bn).“With the sale of these businesses, we have successfully completed…all of our key objectives for 2013,” chairman and chief executive Seifi Ghasemi said.Huntsman officials added that the deal should create $130m (£82m) in annual cost savings by the end of 2015.The firm is already a leader in titanium dioxide, a widely used whitening pigment. It now acquires Rockwood’s Sachtleben-brand TIO2 business, which sells into plastics, paints, inks and similar markets.The colour pigments business that Huntsman is buying sells into plastics, paints and similar markets in powder, granular and liquid grades.The thermoplastic and rubber compounding unit included in the deal operates under the Gomet-brand name and sells primarily into the European automotive market. Its compounds are based on plastics, rubber and polyurethane.
The two other businesses being acquired by Huntsman are involved in timber treatment chemicals and water chemistry.TIO2 was Rockwood’s largest business unit in 2012, with annual sales of almost $900m (£566m), representing around a quarter of total company revenues.
That sales total was down more than 4% compared with 2011, while the unit’s 2012 pre-tax profit of $165m (£104m) was down 36% over the same period. Separate sales totals for other businesses being acquired by Huntsman were not available.
Huntsman ranks as a major producer of TIO2, PU and other specialty materials. The firm employs 12,000 worldwide and has annual sales of more than $11bn (£6.9bn).
The five company-deal will make Huntsman the world's second largest TIO2 producer with a 16% market share, trailing only DuPont at 20%.
The businesses being acquired had total sales of $1.5bn (£0.94bn) in the year ended 30 June.
Almost $1bn (£0.63bn) of that amount came from TIO2, with $330m (£207m) coming from pigments, $135m (£85m) from timber chemicals, $30m (£19m) from water chemicals and $15m (£9.4m) from compounding. The businesses employ 3,300 worldwide and operate 20 plants – 10 in Europe, eight in North America and two in Asia.
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