Evonik to acquire specialty & coating additives business of Air Products for $3.8 bn

German specialty chemicals company Evonik Industries AG yesterday struck a deal to buy the specialty and coating additives operations of US industrial gas producer Air Products and Chemicals Inc for $3.8 billion.

Evonik will fund half of the outlay for the acquisition through the company's own funds, and the other half from additional debt.

The Essen-based company said that the acquisition would strengthens its leading position in the attractive growth market for specialty & coating additives and secure its leading position in North America.

The deal is expected to generate annual synergies of $80 million.

The Specialty & Coating Additives business of Air Products is the Performance Materials Division within the Materials Technologies Segment of Air Products and Chemicals.

In 2015, the business generated a turnover of around $1.1 billion and posted EBITDA of $242 million.

It has around 1,100 employees at 11 production and development locations.

Evonik said that while the focus of the Air Products' business is on North America and Asia, Evonik is particularly strong in Europe, which will crucially boost its standing in the North American market, and also allow it to reduce its dependence on the European market thereby better protecting its own business against economic fluctuations in individual regions.

Klaus Engel, CEO of Evonik, said, "With this acquisition we are expanding our portfolio with precisely the right markets, products and innovations and continuing to invest in our growth and profitability."