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DEGUSSA TO SELL CATALYST UNIT
Deal abets company's transformation into a specialty chemicals player
ALEX TULLO
Degussa is exiting one of its first businesses and bringing itself closer to its goal of focusing on specialty chemicals by selling Degussa Metals Catalysts Cerdec (dmc2) to Cleveland-based OM Group (OMG) for about $1.1 billion. In turn, OMG has agreed to sell the ceramics, pigments, and electronic materials assets of dmc2 to Ferro Corp. for about $540 million.
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MOVING ASSETS Degussa technician tests automotive catalyst. |
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The Degussa unit's core businesses include precious-metal management, catalysts, and ceramic materials. Dmc2 generates about $820 million in annual sales, excluding precious-metal sales and trading.
Degussa decided to carve out the business last year and had plans for a public offering of dmc2 stock. But given the recent performance of financial markets, the company decided that selling the unit to OMG was a better option.
"The acquisition of dmc2 will significantly expand our product offering into fast-growing and high-value-added market segments," says James P. Mooney, OMG's chairman and chief executive officer. OMG currently makes metal and chemical products based primarily on nickel, cobalt, and copper. The deal will take OMG into new markets, such as automotive catalysts, and will give it a position in fuel-cell components, an area that OMG has wanted to enter.
From OMG, Ferro will receive the Degussa unit's electronic materials, Cerdec ceramic materials units, glass systems, and performance pigments businesses, which together generate about $520 million in annual sales. "We couldn't have made a better acquisition," says Hector R. Ortino, Ferro's chairman and CEO, noting that Ferro had been eyeing these businesses for years.
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