LANXESS to sell organic leather chemicals business to TFL
CologneAugust 13, 2020
Specialty chemicals company LANXESS is selling its organic leather chemicals business to TFL Ledertechnik GmbH. TFL is a global supplier of leather chemicals and a portfolio company of US investment company Black Diamond Capital Management, L.L.C. Both companies signed an agreement to this effect on August 12, 2020. The purchase price comprises a fixed component of EUR 80 million and a performance-related component of up to EUR 115 million. In addition, TFL will assume certain liabilities associated with the business. The transaction is still subject to the approval of the relevant authorities. LANXESS expects the transaction to close around mid-2021.
“We are convinced that the transfer to TFL will open up new growth and development prospects for the business and will thus significantly strengthen it,” said Matthias Zachert, Chairman of the Board of Management of LANXESS. “At the same time, we are making LANXESS somewhat more independent from the automotive industry, a key target industry for leather products.”
Tanneries use organic leather chemicals in all stages of leather production. LANXESS manufactures the products in Leverkusen (Germany), Filago (Italy), and Changzhou (China). This is complemented by application-oriented laboratories and sales offices around the world. TFL will take over all operations of the organic leather chemicals business line from LANXESS with a total of around 460 employees. In 2019, LANXESS generated sales in the lower three-digit million euro range with the business.
With the sale, LANXESS is withdrawing completely from leather chemicals. The specialty chemicals company had already divested its chrome chemicals business, as well as its stake in the South African chrome ore mine (transaction expected to be completed by the end of 2020). LANXESS has been reporting the Leather business unit as a discontinued operation since the end of last year.
“We are convinced that the transfer to TFL will open up new growth and development prospects for the business and will thus significantly strengthen it,” said Matthias Zachert, Chairman of the Board of Management of LANXESS. “At the same time, we are making LANXESS somewhat more independent from the automotive industry, a key target industry for leather products.”
Tanneries use organic leather chemicals in all stages of leather production. LANXESS manufactures the products in Leverkusen (Germany), Filago (Italy), and Changzhou (China). This is complemented by application-oriented laboratories and sales offices around the world. TFL will take over all operations of the organic leather chemicals business line from LANXESS with a total of around 460 employees. In 2019, LANXESS generated sales in the lower three-digit million euro range with the business.
With the sale, LANXESS is withdrawing completely from leather chemicals. The specialty chemicals company had already divested its chrome chemicals business, as well as its stake in the South African chrome ore mine (transaction expected to be completed by the end of 2020). LANXESS has been reporting the Leather business unit as a discontinued operation since the end of last year.
LANXESS is a leading specialty chemicals company with sales of EUR 6.7 billion in 2023. The company currently has about 12,400 employees in 32 countries. The core business of LANXESS is the development, manufacturing and marketing of chemical intermediates, additives and consumer protection products. LANXESS has achieved leading positions in the Dow Jones Sustainability Index and the MSCI ESG and ISS ESG ratings, among others, for its commitment to sustainability.
This company release contains certain forward-looking statements, including assumptions, opinions, expectations and views of the company or cited from third party sources. Various known and unknown risks, uncertainties and other factors could cause the actual results, financial position, development or performance of LANXESS AG to differ materially from the estimations expressed or implied herein. LANXESS AG does not guarantee that the assumptions underlying such forward-looking statements are free from errors, nor does it accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecast developments. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, any information, estimates, targets and opinions contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and accordingly, no representative of LANXESS AG or any of its affiliated companies or any of such person's officers, directors or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
