Evonik Industries is acquiring the speciality additives business (Performance Materials Division) of US company, Air Products, for US$3.8bn.

Antitrust authorities have approved the transaction and integration of the acquired business is underway.

Transaction financing was completed successfully in September and will consist of the company’s own funds of EUR1.6bn, with the other half to be financed by bonds with a nominal value of EUR1.9bn. 

“The successful completion of the acquisition paves the way for swiftly merging the activities of Evonik and the acquired units of the Air Products Performance Materials business,” said Evonik chairman, Klaus Engel.

“It puts Evonik in a position for further profitable growth in the attractive speciality additives market.” 

For his part, Evonik COO, Sven Kaufmann added: “We are well prepared to ensure a smooth business transition and a successful integration. To this end, we have worked intensively with Air Products over the past few months to develop integration plans,

Annual synergy effects of US$80m should be fully realised by 2020 at the latest. Evonik expects to leverage synergies in the amount of EUR10 to EUR20m in 2017.”

Since the transaction is partly structured as an asset deal, it will lead to tax benefits as a consequence of write-offs. These benefits amount to a net present value of more than US$500m, which can be used on a pro-rated basis in the 2017 business year.