The Hindu Business Line : Lanxess buys 70% stake in Petroflex for Rs 1,148 cr

Mumbai, Dec. 19 The German-based speciality chemical manufacturing group Lanxess has acquired about 70 per cent in Brazil-based Petroflex S.A for about Rs 1,148 crore (€198 million).

Lanxess AG, Leverkusen has a presence in India, and one of its units, Lanxess ABS Ltd, is listed on the Bombay Stock Exchange (BSE).

Petroflex, a listed company based in Rio de Janeiro, is among the world’s large-scale producers of synthetic rubber.

The stake, to be purchased by Lanxess, includes the holdings of the current major shareholders Braskem, a leading thermoplastic resin manufacturer in Latin America and Unipar, a Brazil-based chemical company.

The transaction requires the approval of the relevant anti-trust authorities.

Lanxess will submit a public takeover offer for the remaining ordinary shares at the proper time under the Brazilian law.

“As is customary with such transactions, the final purchase price, including financial liabilities to be assumed, will be determined after closing,” said the Chief Financial Officer, Mr Matthias Zachert.

“We are financing the acquisition from liquidity and existing credit facilities,” he added. The financial liabilities as of September 30, 2007, amounted to Rs 632 crore (€109 million).

“Petroflex ideally complements our product portfolio and strengthens our position in one of the world’s most important growth markets,” said Lanxess Management Board Chairman Mr Axel C. Heitmann. “In this way, we are significantly expanding our position in Latin America as a whole.”

In 2006, Petroflex sales were about Rs 2,900 crore (€500 million). The group’s sales this year is expected to be over four lakh tonnes.

Its products range from solution rubber to emulsion rubber and comprise 70 brands. The products are used, especially in the manufacture of tyres as well as for tubing and plastics.

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