Evonik buys Air Products’ performance materials division

Specialty chemical maker Evonik Industries AG is acquiring the performance materials division of Allentown, Pa.-based Air Products and Chemicals Inc. for US$3.8 billion.

In a statement, Germany-based Evonik said the acquisition will strengthen its position in the high-margin specialty and coating additives market.

The transaction is intended to be completed by the end of the year.

The two businesses serve three rapidly growing core markets, Evonik said: coating and adhesive additives, high-value polyurethane (PU) foam additives, and specialty surfactants for industrial and institutional cleaning.

The companies are also geographically compatible, as the Air Products business is focused on North America and Asia, while Evonik’s base is in Europe. Moreover, by growing its presence in North America and Asia, Evonik is reducing its dependence on the European market and protecting its business from economic fluctuations in individual regions.

Evonik expects to generate cost synergies of $60 million per year, which are expected to be fully realized by 2020 at the latest. In total, the deal is expected to generate annual synergies of US$80 million, Evonik said.