LNXSY - Lanxess Advent to buy Royal DSM's engineering business in Euro3.7B deal

Lanxess (OTCPK:LNXSF) (OTC:LNXSY) and private-equity firm Advent International said on Tuesday they agreed to acquire Royal DSM's engineering materials business for ~€3.7B (nearly $4B) and create a new joint venture for high performance plastics. The DSM engineering materials business, which would become part of the joint venture, represents sales of ~€1.5B and operating profit margin of ~20%, Lanxess said. Lanxess (OTCPK:LNXSF) also will transfer its own high performance materials business into the JV and receive €1.1B as well as a stake of as much as 40% in the new business. The German chemical company said it plans to use the proceeds from the deal to lower its debt and launch a €300M stock buyback program. Lanxess (OTCPK:LNXSF) shares are "cheap from a fundamental perspective, but all peers are cheap," The Investment Doctor writes in a bullish analysis published on Seeking Alpha.

For further details see:

Lanxess, Advent to buy Royal DSM's engineering business in €3.7B deal