Orion Engineered Carbons and Evonik Industries have reached an agreement for Orion to acquire Evonik’s 52% stake, as well as Deutsche Investitions- und Entwicklungsgesellschaft’s (DEG) 15% stake, in Qingdao Evonik Chemical Co., (QECC).
QECC is a joint venture that was established by Evonik, DEG and Jiaozhou Finance Investment Center (JFIC) in 1994, based in Qingdao, China. It has production capacity of approximately 75,000 metric tons of carbon black per annum. The plant is equipped with three production lines and its main manufacturing focus is said to be on high-end carbon black products.
Orion will initially step into the established JV in place of Evonik and DEG, but OEC and JFIC are in advanced talks regarding the transfer of JFIC shares to Orion in accordance with regulations governing Chinese state-owned enterprises.
“We are pleased with the progress made on bringing this facility back into our global carbon black manufacturing network,” said Jack Clem, CEO of Orion. “We believe that this acquisition will greatly improve our ability to serve the highly important Chinese market, as well as the rest of Asia-Pacific, over and above the current use of our global network for exports to that region.
“I am thrilled that our plant in Qingdao will become a key pillar of Orion’s base of operations in APAC, joining our two plants in South Korea and our regional headquarters in Shanghai,” he added. “This increased presence will enhance our portfolio of innovative products and solutions that are valued by our customers and business partners.”
The agreement is subject to a Chinese government review and other customary closing conditions and is expected to close in the fourth quarter of 2015. The European Commission approved Orion’s prospective acquisition of QECC concurrent with its consideration of the sale of Evonik’s Carbon Black business to Rhône Capital and Triton Advisors in 2011. Until the closing, Orion and QECC will continue to operate independently.
Orion Engineered Carbons will be exhibiting at Tire Technology Expo in Hanover, February 16-18, 2016.