12 March 1998: Recent press reports say that two German companies have announced a merger that will create one of the world“s top 10 chemical businesses. The announcement last week by chemical group …
12 March 1998: Recent press reports say that two German companies have announced a merger that will create one of the world“s top 10 chemical businesses. The announcement last week by chemical group Degussa AG and Huels AG, the chemical offshoot of Veba AG, was said to be seen by analysts as further evidence of the rationalisation taking hold in the worldwide chemcial industry. Veba said it did not regard the merger as a “spin-off”, as chemicals would remain a core business. However, the overhaul of Veba“s structure could encourage speculation that the group will take advantage of planned changes in German law to launch a share buy-back to enhance shareholder value. The merger, under which Huels acquired control of Degussa, gave birth to the venture known as Degussa-Huels, which is expected to have sales of around DM 25 billion. The Degussa-Huels agreement follows the purchase last May by Veba of a 36% stake in Degussa. Veba now owns between 60% and 65% of the new group. Degussa recently posted a turnover of about DM 15 billion (US$ 12.4 billion) and Huels about DM 10.5 billion. Altogether, the two groups have a workforce of nearly 55,000. This recent merger was announced just after another German chemical group, Altana AG, reported that it had acquired all of Camattini SpA, an Italian electrochemical firm.