Shares in German specialty chemical group Lanxess soared on Monday after it said it was paying 2.4 billion euros (2.7 billion dollars) to buy its smaller rival, the US-based Chemtura Corp, in a bid to become a leader in the additives business.
Lanxess said the tie-up with Chemtura would allow the Cologne-based group to expand its business in lubricant additives and flame retardant business.
"With this acquisition, we are forming a champion in the field of additives and are strengthening our already profitable portfolio," Lanxess' board of management chairman Matthias Zachert said in a statement.
Lanxess is paying 33.50 dollars a share for 18.9 per cent more than Chemtura's closing price on Friday. The takeover is expected to be completed in the middle of next year.
Shares in Lanxess jumped about 12 per cent following the company's announcement, while Chemtura stock surged 17 per cent in pre-market trading.
Once the merger is complete, the combined company will have a workforce of 19,200 employees.
With about half of its business derived in North America, Chemtura posted a total revenue of about 1.5 billion euros last year. Lanxess booked revenue of about 8 billion euros last year.