Lanxess Exits Leather Chemicals Business
In another divestment shortly after selling its reverse osmosis business to Suez in July, German specialty chemicals producer Lanxess is unloading its organic leather chemicals business to compatriot TFL Ledertechnik, a global supplier of leather chemicals.
The transaction is expected to close around mid-2021, subject to the approval of the relevant regulatory authorities.
The undisclosed acquisition price comprises a fixed component of €80 million and a performance-related component of up to €115 million. The buyer will assume certain unquantified liabilities. TFL, once part of Switzerland’s Ciba-Geigy, is now owned by private equity investor Black Diamond Capital Management.
On completion of the deal, Cologne-based Lanxess will finally exit the leather chemicals business, a legacy of its former owner Bayer. While seeking a buyer, the company has reported the activities as a discontinued operation since the end of last year.
A major advantage of the divestment, CEO Matthias Zachert noted, is that Lanxess will gain “somewhat more independence” from the automotive industry, a key target industry for leather products. Additionally, he said, the transfer to TFL “will open up new growth and development prospects for the business and will thus significantly strengthen it.”
Lanxess manufactures leather chemicals in Leverkusen, Germany, Filago, Italy, and Changzhou, China. The business with around 460 employees and sales put in the “lower three-digit million euro range” also operates application-oriented laboratories and sales offices worldwide.
The combined TFL and Lanxess leather businesses will employ around 1,200 people worldwide and have pro forma sales of €450 million. With production facilities in Germany, Italy, France, Brazil, India and China, along with a presence in over 90 countries, the enlarged business will provide truly global coverage, said TFL’s group CEO Peter Amman.
Amann said the enhanced scale of operations will support his company’s goal to build the world’s top performing leather chemicals producer and significantly strengthen its finishing product portfolio and presence in the automotive industry.
Author: Dede Williams, Freelance Journalist
