Bayer announced in March their intention to divest of Wolff Walsrode as part of their plan to finance the acquisition of Schering AG. Today they announced that they are planning to sell the business to Dow Chemicals who are already the largest producer of non ionic cellulose ethers globally. The transaction is expected to close in the first half of 2007, subject to regulatory approval. Financial terms have not been disclosed.
The full anouncement reads:
Midland, USA / Leverkusen, Germany – The Dow Chemical Company and the Bayer Group today announced that they have reached agreement for Dow to acquire Bayer’s Wolff Walsrode business group, primarily involved in cellulose products. The transaction is expected to close in the first half of 2007, subject to regulatory approval. Financial terms have not been disclosed.
For Dow, the agreement underscores the Company’s commitment to strengthen its Performance businesses portfolio as part of its goal to dampen earnings cyclicality while driving growth.
“We continue to deliver on our strategy – the acquisition of Wolff Walsrode is another step along our path to maximize long-term shareholder value from investments into advantaged technologies, growing end-use markets and emerging geographies,” said Andrew Liveris, Dow’s chairman and chief executive officer.
Bayer announced in March 2006 that it would divest its subsidiaries H.C. Starck and Wolff Walsrode AG. “I’m pleased that following the sale of H.C. Starck, we’ve also found a buyer that offers promising perspectives for the future of Wolff Walsrode,” said Bayer management board chairman Werner Wenning. “As planned, the proceeds will help to finance the acquisition of Schering.”
Wolff Walsrode, with 2005 revenues of more than US Dollar 400 million, would become an integral part of Dow’s Water Soluble Polymers business.
“The acquisition will create a US Dollar 1 billion performance business for Dow. We will accelerate growth, ensure long-term supply, and offer a broad portfolio of differentiated solutions by expanding our collective expertise and capabilities,” said Romeo Kreinberg, Dow’s executive vice president for the Performance Plastics and Chemicals portfolio.
Dow and Wolff Walsrode are complementary, bringing different products, processes, applications and expertise to the combined business. “Dow is a good strategic fit for Wolff Walsrode and our expertise is an excellent basis for further growth in cellulosics in particular,” said Dr. Dieter Herzog, managing director of Wolff Walsrode.
The new business would combine Wolff’s advanced production technology and proficiency in HEMC (Hydroxyethyl Methyl Cellulose) and CMC (Carboxymethyl Cellulose) chemistry with Dow’s leading HPMC (Hydroxypropyl Methyl Cellulose) product brands and industry expertise. Cellulose derivatives produced by the combined businesses are used across a broad range of industry sectors, including construction materials, personal care, pharmaceuticals, food and a number of specialty applications.