Investor Alert

Sept. 30, 2020, 2:29 a.m. EDT

Covestro to pay €1.61B for Royal DSM's resins unit

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

or Cancel Already have a watchlist? Log In

By Joshua Kirby

Covestro AG said Wednesday that it signed an agreement to acquire the resins and functional materials business from Royal DSM for a total of 1.61 billion euros ($1.89 billion).

The total deal price of EUR 1.61 billion corresponds to a net enterprise value of approximately EUR1.55 billion, Covestro said. The deal is being financed through an agreement that Covestro will refinance through a mix of equity, debt instruments and cash generation, the company said. It is planning an equity issuance to raise around EUR450 million.

The German chemicals company said integration of the business will add around EUR1 billion in revenue and EUR141 million in earnings before tax. Permanent synergies are expected to reach EUR120 million a year upon full integration by 2025, it said. The deal could increase revenue growth in Covestro's coatings, adhesives, specialties segment by more than 40% to EUR3.4 billion.

Covestro said the deal will be completed in the first quarter of 2021, subject to regulatory approvals including antitrust clearance.

This Story has 0 Comments
Be the first to comment
More News In

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.