LANXESS Sells Paper Business Unit To Finnish Kemira Group

Leverkusen, Germany — The LANXESS Group is to sell its Paper Business Unit to the Finnish chemicals group Kemira Oyj, Helsinki. A purchase agreement to this effect was recently signed. The transaction requires the approval of the antitrust authorities, which means that a closing of the agreement is not to be expected until next year. In the 2004 fiscal year, the Paper Business Unit achieved sales of about EUR 240 million. The purchase price will be EUR 88 million.

"We have sold this operation to a globally positioned partner. The Kemira Group provides this paper operation with outstanding potential for development," said LANXESS CEO Axel C. Heitmann. Consolidation is continuing in the paper industry, with fewer and fewer companies dividing up the market among themselves. "In addition, many customers want the complete range of services from a single supplier, but our Business Unit was unable to cover the entire spectrum," explained Heitmann. The Leverkusen company had therefore announced back in April that it was examining strategic options for the business. After losses in 2003 and 2004 the Paper Business Unit has recently been able to perform better.

Following the announcement by the LANXESS Group last week of the imminent sale of its Dorlastan business to the Japanese company Asahi Kasei Fibers and the divestment of the Rhein Chemie subsidiary iSL-Chemie, the sale of the Paper Business Unit is a further important step in the optimization of the company's portfolio.

The Paper Business Unit employs 375 people at its production sites in Leverkusen and Bushy Park in the US state of South Carolina. The wide range of high-grade products it offers include dyes, fluorescent whitening agents, sizing agents, strength agents and retention aids. These products make Kemira's portfolio of products a very attractive package of solutions for the paper industry.

The stock-market-listed Kemira Group is a leading worldwide chemical company with core activities in the fields of pulp, paper and water chemistry. In 2004, the company posted sales of around EUR 2.5 billion with a workforce of over 7,000 employees.

SOURCE: LANXESS