Lanxess to acquire DSM Elastomers

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, the Netherlands. 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.

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 kt. DSM's other EPDM plant is based in Triunfo, Brazil, with an annual capacity of 40 kt. Lanxess plans to base the headquarters of the combined EPDM businesses in Sittard-Geleen.

Lanxess' Technical Rubber Products business unit (TRP), headed by Guenther Weymans, sells EPDM under the brand name Buna EP. Lanxess produces EPDM in Marl, Germany, and Orange, USA, with a combined annual capacity of 120 kt. Additional products in TRP's portfolio include CR, HNBR, EVM and NBR.

"We look forward to welcoming DSM's professional EPDM team as well as its impressive assets to our core synthetic rubber activities," said Axel C. Heitmann, Lanxess CEO. "The transaction will also be an important step towards our goal of achieving roughly EUR 1.4 billion EBITDA pre exceptionals in 2015."

Feike Sijbesma, CEO/Chairman of the DSM Managing Board, said: "The sale of DSM Elastomers completes our Vision 2010 strategy to become a focused Life Sciences and Materials Sciences company. This transformation has been achieved within our desired timeframe and at favourable conditions for our shareholders and employees. DSM has now entered a new era focused on driving growth and returns with enhanced earnings quality and confidence in meeting our medium-term targets."

According to Lanxess, the global rubber market for EPDM is expected to show single-digit percentage growth per annum in the next ten years, driven by rising demand in China and Brazil.