Lanxess Acquisition of Chemtura, a Done Deal

Those of us that have been reporting on the industry for quite a few years have seen some pretty major shakeups in terms of mergers and acquisitions and spin-offs of a company’s business segments. Chemtura (formerly Crompton, among other names) is one such company. So, too, is LANXESS Corporation, formerly a subsidiary of the former Bayer MaterialScience, which has now completed its acquisition of Chemtura.

Starting around 2008, we saw Chemtura, this once-giant in plastic additives begin to spin off major parts of its business. A notable sampling includes: the sale of its proprietary OBS (organic-based heat stabilizers) for rigid PVC applications to Baerlocher; the sale of the rest of its PVC additives business to Galata Chemicals, now part of India’s Artek Surfin; and, the sale of its industry-recognized UV stabilizer and antioxidants business to Addivant. But, in terms of plastic additives, Chemtura held onto a relative gold mine—its Great Lakes Solutions business—a global leader in brominated flame retardant additives, bromine and bromine derivatives.

Moreover, it further nurtured it so, just last Fall, Great Lakes Solutions opened its new, global center for excellence for flame retardant R&D and applications development at the Nudenberg-Wheeler Technology Research Campus in Naugatuck, Conn. These laboratories reportedly house the latest equipment for organic synthesis, flame retardant testing, physical property testing, chemical analysis, and process development.  Application areas include not only small-scale benchtop extrusion, injection molding and combustion testing equipment for the rapid formulation of new, exploratory flame retardants, but also large-scale extruders and molding equipment for formulation improvement and new applications of existing products.

With this acquisition, Lanxess significantly expands its market position for flame retardant additives. The high-effectiveness of the bromine flame retardant additives used among others in the construction industry, are said to be an ideal complement for the existing Lanxess business with phosphorus-based flame retardant additives. Said Anno Borkowski, head of the new Additives business unit, which combines flame retardant and industrial lubricant additives, “Flame retardance requirements are continuously rising due particularly to the trend toward energy-efficient construction. This acquisition will also make us one of the world’s leading suppliers of flame retardant additives. As of today, we can offer our customers an array of complementary brominated and phosphorus-based products from a single source.” Lanxess anticipates medium-term annual growth rates of 3 to 4 percent for the area of flame retardant additives.

This Additives business unit combined with the company’s Rhein Chemie business unit, headed by Philipp Junge and comprising rubber and color additives businesses, are now part of Lanxess’ newly-formed Specialty Additives segment. Through this acquisition, Lanxess increased its foorprint in North America, whereby it is now represented at 24 production sites, up from 12,  and employs approximately 2800 staff, up from 1500. The region’s share in global sales increases from about 17% to about 21%.

The acquisition also opened up new business fields for Lanxess: urethanes, including hot-case prepolymers, special aqueous urethane dispersions and polyester polyols—components of specialty polyurethanes used in construction, mining, oil, gas, athletic and electronic equipment; and, organometallics—chemical compounds used as catalysts in polymer production or for the synthesis of fine chemicals and pharmaceuticals, among other applications.