CVC buys over 25 per cent stake in Evonik for $3.71 billion

05 June 2008

CVC Capital Partners will acquire a 25.01 per cent stake in German chemicals and energy group Evonik Industries AG in a bid valued at €2.4 billion ($3.71 billion).

CVC is buying the stake from the government-owned RAG Foundation, which was set up to assume the liabilities of Germany's coal-mining industry, in return for the proceeds of selling Evonik.

The acquisition followed a months-long battle, involving three other investment funds, including Blackstone, KKR and Bain Capital, reports said.

CVC offered the best price and agreed on on future strategy, said RAG. ''It wasn't just the financial side of things that made us choose CVC," said RAG Foundation spokesman Klaus-Henning Groth.

Evonic will now go for an initial public offer and a listing on the DAX within five years. The two will also retain it as an integrated company rather than break it up, Growth said in a statement.

RAG had, earlier this year, frozen plans to float Evonik and opted for an auction of the minority stake, which reportedly attracted unsuccessful bids from Bain Capital LLC, Blackstone Group LP and Kohlberg Kravis Roberts & Co.