Kemira Oyj and the German company Lanxess have reached an agreement on the acquisition of Lanxess' paper chemicals business by Kemira.  The net sales of the Lanxess paper chemicals business totalled approx. EUR 240 million in the year 2004. The debt-free price of the business is EUR 88 million. It has been estimated that the deal will raise Kemira's earnings per share from the year 2007 on. It has been estimated also that the deal will dilute Kemira's earnings per share by 5 to10 cents per share in the year 2006 as the business has been loss-making and because of the integration expenditure. After the next three years Kemira expects synergy and cost benefits in the area of EUR 20 million annually arising from the integration of businesses.

Lanxess is a global paper chemicals supplier, with special competence in functional wet-end chemicals for paper machines. ”The acquisition of the Lanxess paper chemicals business is in line with Kemira's growth strategy. Through this deal we will further strengthen our position in the market for paper chemicals", says Lauri Junnila, President, Kemira Pulp & Paper Chemicals Business Area. ”When finalized this agreement will raise Kemira to be the biggest supplier in pulp and paper chemicals globally. On one hand the business we acquire will complete our range of products in specialty chemicals very well indeed, and on the other hand the deal will also add to our strength in geographical presence, especially in Germany and North America, Asia and South America", he continues.
 
The main range of Lanxess products consist of colourants, optical brighteners and sizing. Another large part of the company's net sales arises from toll-manufactured products which are traded for the pulp and paper industry. Lanxess ranks as number three globally in its sales of optical brighteners to the paper industry. Lanxess is the leading supplier of direct anionic dyes and organic pigments to North America.

The company's production plants are located in Leverkusen, Germany, and in Bushy Park, South Carolina, USA. Lanxess employs 375 persons globally, a large number of whom are engaged in marketing, technical service and research.
 
The agreement is subject to approval by authorities being granted and the other conditions and terms of the contract being met. Kemira's net sales in pulp and paper chemicals will total approx. EUR 1.1 billion, subject to the agreement being finalized.

”After this acquisition Kemira will be the top player in all of its core business areas. Yet another major milestone has been reached in our strategic development of Kemira. We are in a good position to proceed towards our objectives”, says Lasse Kurkilahti.

Additional information (.pdf)

For further information please contact:

Kemira Oyj

Lasse Kurkilahti, CEO, tel. +358 ()10 862 1801

Pulp & Paper Chemicals Business Area 
Lauri Junnila, President
Tel. +358 (0)10 862 1587, GSM +358 (0)50 598 8050

Michael Strand, Vice President, Mergers & Acquisitions
Tel. +358 (0)10 862 7285, GSM +358 (0)50 69 285