Lanxess to sell organic leather chemicals business to TFL
Lanxess is selling its organic leather chemicals business to TFL, a supplier of leather chemicals. Both companies signed an agreement to this effect on August 12, 2020. The purchase price comprises a fixed component of €80 million and a performance-related component of up to €115 million. TFL will assume certain liabilities associated with the business.
The transaction is still subject to the approval of the relevant authorities. Lanxess expects the transaction to close around mid-2021. Tanneries use organic leather chemicals in all stages of leather production. Lanxess manufactures the products in Leverkusen (Germany), Filago (Italy), and Changzhou (China). This is complemented by application-oriented laboratories and sales offices around the world. TFL will take over all operations of the organic leather chemicals business line from Lanxess with a total of around 460 employees. In 2019, Lanxess generated sales in the lower three-digit million euro range with the business, according to a press release by the company.
With the sale, Lanxess is withdrawing completely from leather chemicals. The specialty chemicals company had already divested its chrome chemicals business, as well as its stake in the South African chrome ore mine (transaction expected to be completed by the end of 2020). Lanxess has been reporting the leather business unit as a discontinued operation since the end of last year.
“We are convinced that the transfer to TFL will open up new growth and development prospects for the business and will thus significantly strengthen it. At the same time, we are making Lanxess somewhat more independent from the automotive industry, a key target industry for leather products,” Matthias Zachert, chairman of the board of management of Lanxess said.
Lanxess is a leading specialty chemicals company with sales of €6.8 billion in 2019. The company currently has about 14,300 employees in 33 countries. The core business of Lanxess is the development, manufacturing, and marketing of chemical intermediates, additives, specialty chemicals and plastics.