January 3 2023, David R Brown
Brenntag pulls out of buyout talks to acquire Univar Solutions
German chemicals distributor Brenntag has pulled out of discussions to potentially acquire US rival Univar Solutions. This most recent development has seen the company terminate the preliminary buyout talks just a few weeks after declaring an interest and making waves about a possible mega-merger.
Brenntag has decided it is no longer proceeding with discussions
Brenntag Company Statement
In late November 2022, Brenntag had confirmed the possibilities of a deal in global chemical distribution after it held preliminary discussions with Univar Solutions over a potential acquisition.
Brenntag saw its shares jump by almost 6% following an official announcement late January 2nd that it has halted talks with Univar Solutions. Shares in the company had sharply fallen following the initial November announcement.
A company statement from Brenntag said, “Further to the announcement from 25 November 2022, confirming early-stage discussions with Univar Solutions regarding a potential acquisition of Univar Solutions by Brenntag, Brenntag has decided it is no longer proceeding with those discussions.”
Univar Solutions also confirmed that Brenntag has ended its discussions with the company about a potential transaction. “The company and its Board of Directors are committed to acting in the best interest of its stockholders and will continue discussions relating to other indications of interest that have been received with respect to a potential transaction. There can be no assurance that the ongoing process will result in any transaction.”
A merger between #1 player Brenntag and #2 Univar Solutions would have created an EUR 26Bn distributor giant, based on 2022 projections. The combined company would have been 5 times the size of its nearest rivals and it would have also become one of the Top 20 largest chemical companies globally. And this maybe the root of the issue. During the latter part of 2022, there was growing speculation that the possible combination of the two companies would lead to a lengthy and difficult antitrust reviews in both Europe and Amnerica. Both companies remain guarded over specific details of why the talks broke down. It has also been suggested that Brenntag could improve itself by separating its Specialties and Essential divisions into two distinct listed companies.
Brenntag's chief executive Christian Kohlpain has previously stated that the key player in global chemical and ingredient distribution is still keen on further mergers and acquisitions, looking to double annual spending tp €400 to €500 million.
About Brenntag
Brenntag is the global market leader in chemicals and ingredients distribution. The company holds a central role in connecting customers and suppliers of the chemical industry. Headquartered in Essen, Germany, Brenntag has more than 17,000 employees worldwide and operates a network of about 700 sites in 78 countries. In 2021, Brenntag generated sales of around EUR 14.4 billion.
Source(s): Brenntag Press Release
Further Information
Visit: https://www.brenntag.com