China's Wanhua Industrial Group has acquired full control of Hungarian isocyanate maker BorsodChem by exercising a call option, Wanhua said on Tuesday.

"The integration of BorsodChem into the Wanhua Group creates the third largest isocyanate producer in the world by turning both companies from two regional players into one global company," Wanhua Chief Executive Officer Jason Ding said in a statement.

The option was part of a deal struck in June about the financial restructuring of BorsodChem.

Isocyanates are chemicals used in the manufacture of flexible and rigid foams, fibers, coatings, and are increasingly used in the automobile industry.

In the June deal Wanhua received an approximately 38% stake in First Chemical Holding (FCH), the holding company of BorsodChem, for €140 million ($192.2 million), from FCL, a company controlled by Permira Funds and VCP Capital Partners.

By exercising the option, Wanhua acquired all the shares held by funds advised by Permira and VCP, Wanhua said in the statement.

"This transaction is highly significant for Central Europe and will pave the way for further investments by Chinese companies in the region," said Heinrich Pecina, Senior Partner of VCP in the statement.

The funds from the June deal are used by BorsodChem to complete the construction of its new TDI-2 (toluene diisocyanate) plant and new nitric acid plant.
Wanhua said it now saw the long-term development of BorsodChem secured, adding that it was financially backed by a syndicate led by the Bank of China. It did not disclose financial details of the option deal.

"We aim to expand BorsodChem and make it the most competitive isocyanate producer in Europe," Ding added.