Wacker to acquire Air Products' stake in construction polymers joint ventures

12-Dec-2007

Wacker Chemie AG plans to acquire full ownership of Air Products polymers (APP) and Wacker Polymer Systems (WPS), its two joint ventures with Air Products and Chemicals, Inc. The two partners announced they have signed an agreement to this effect. Wacker expects that the acquisition will provide strategic advantages to its global construction-polymers business. Benefits include synergies and cost advantages stemming from backward integration at U.S. and Asian dispersion plants, as well as the expansion of its supply chain outside the eurozone.

The closing of the transaction, which is subject to approval by the relevant antitrust authorities, is expected in Q1 2008. As part of the agreement, Wacker retains the Vinyl Acetate Ethylene (VAE) activities of the Joint Venture, while Air Products will receive full ownership in the Elkton, Md., and Piedmont, S.C., production facilities and their related businesses plus cash considerations of USD 265 million. With approval, the transaction would contribute substantially to further develop WACKER's polymer business to around EUR1 billion in sales in 2008.

Air Products issued a formal statement back in March 2006, announcing its intention to sell its APP and WPS shareholdings. Currently, WACKER owns 35 percent and Air Products 65 percent of APP. As for WPS, WACKER holds 80 percent and Air Products, 20 percent.

The planned acquisition focuses on the activities of APP and WPS in vinyl acetate ethylene-based dispersions and dispersible polymer powders. Consequently, Wacker plans to acquire all of the two companies' related activities at their APP and WPS sites in Allentown (PA, USA), Calvert City (KY, USA), Cologne and Burghausen (Germany), South Brunswick (NJ, USA) and Ulsan (Korea). Wacker intends to continue operating this business out of the Lehigh Valley. The Elkton (MD, USA) and Piedmont (SC, USA) sites and the associated businesses will become fully owned by Air Products.

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