Lanxess, the specialty chemicals company has announced plans to acquire US-based Chemtura Corporation, one of the major global providers of high-quality flame retardant and lubricant additives. With the largest acquisition in its history, Lanxess is building on its own additives portfolio and will become one of the world’s major actors in this growing market.

The companies have signed a definitive acquisition agreement. Under the terms of the agreement, Chemtura shareholders will receive USD 33.50 per share in cash for each outstanding share of common stock held, which represents an 18.9% premium to the stock’s closing share price of USD 28.18 on September 23, 2016. The transaction with an enterprise value of approximately EUR 2.4 billion will be financed by Lanxess mainly through senior and hybrid bonds, as well as from existing liquidity. The transaction, which is expected to close around mid-2017, is subject to approval by Chemtura shareholders, required regulatory approvals and certain other customary closing conditions.

Headquartered in Philadelphia, Pennsylvania, Chemtura has 20 sites in 11 countries and approximately 2,500 employees worldwide. The company reported sales of around EUR 1.5 billion in the last four quarters with EBITDA pre exceptionals of approximately EUR 245 million (EBITDA margin of approx. 16%). Approximately 45% of Chemtura’s revenue is generated in North America. In addition to additives, Chemtura’s portfolio includes urethanes and organometallics.

“With this acquisition, we are forming a champion in the field of additives and are strengthening our already profitable portfolio,” said Matthias Zachert, Chairman of the Board of Management of Lanxess AG. “Through the acquisition, we are further implementing our strategy to become a more resilient and profitable chemical company. We are significantly building on our competitive positioning in medium-sized markets and increasing our presence in North America. Lanxess is taking a next and major step forward on its growth path.”

“The transaction provides premium value to our shareholders and benefits our customers and employees by making Chemtura part of a much larger, stronger global enterprise with the resources to fully support a more diverse suite of specialty chemicals products and services,” said Craig A Rogerson, President, Chief Executive Officer and Chairman of the Board of Chemtura.

For LANXESS, the acquisition of Chemtura will be accretive to earnings per share (EPS) in the first fiscal year, with annual synergies of approximately EUR 100 million expected by 2020. LANXESS is paying an EV/EBITDA multiple of approximately 7x including synergies for this transaction, meeting its target of 7-9x for acquisitions including synergies.