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        PRA

Evonik completes acquisition of Air Products; expects higher EPS in 2017

Evonik

German chemicals firm Evonik Industries has completed the activities to acquire the speciality additives business (Performance Materials Division) of US company Air Products for US$3.8 billion by the end of 2016 as planned. All relevant antitrust authorities have approved the transaction and the integration of the acquired business is underway. The transaction financing was completed successfully in September 2016 and will consist of the company's own funds, with the other half to be financed by bonds.

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 Klaus Engel, Chairman of the Executive Board of Evonik Industries. "It puts Evonik in an excellent position for further profitable growth in the attractive specialty additives market," he said.

The annual synergy effects in the amount of US$80 million can be confirmed at this time and should be fully realised by 2020 at the latest, says Evonik, expecting to leverage synergies in the amount of US$10 to US$20 million in the year 2017.

The acquisition is expected to increase the adjusted earnings per share (EPS) of Evonik in the 2017 business year.

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

The Specialty & Coating Additives business of Air Products is the Performance Materials Division within the Materials Technologies Segment of Air Products and Chemicals. It has around 1,100 employees at 11 production and development locations and offers local customer support in all key global regions.

(PRA)


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