Stahl acquires BASF’s Leather Chemical DivisionThrough the acquisition of the Basf Leather Chemicals, Stahl becomes field leader aiming at achieving a more transparent supply chain in order to keep environmental footprint under control.
The news about the acquisition by Dutch Stahl of the BASF Leather Chemical Division has (understandably) has caused a stir.
By signing this agreement, which is undoubtedly complex given the weight of the two competitors on the playground, Stahl aims at strengthening its competitive position: all the activities of the acquired division will now come under Dutch control, including the production site of L’Hospitalet in Spain and approximately 210 employees scattered all over the world (of which about a hundred are in Asia). Faced with this, Stahl intends to grant BASF 16% of the equity of the Dutch group, a cash consideration of €150 million and the guarantee that nothing or least will change in terms of manufacturing capacity: as quoted in the agreement, the German group will continue to supply «significant volumes of leather chemicals products under mid-term and long-term agreements» to Stahl.
But the real power of this transaction lies in the big financial changes involved. According to initial estimates, a new actor has entered the world stage generating net sales of €850 million and EBITDA of about €200 million. The gross operating profit, called EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), is an indicator highlighting the earnings of a company based on its operating management, therefore not considering interests (financial management), taxes (tax management), goods depreciation and amortization.
«This partnership is a big opportunity for the Basf Leather Chemicals Division», said Michael Heinz, Member of he Board of Executive Directors of BASF. «With complementary forces, BASF and Stahl are creating a leading company in leather chemicals with a strong focus on innovation». «These are exciting and challenging times for the chemical industry in terms of sustainability and innovation. We believe we can only make a real difference if we can work on a large scale within the industry», said Huub van Beijeren, CEO of Stahl. «The signing of this agreement enables us to accelerate the process of creating a more transparent sustainable supply chain as we share the same vision on reducing the environmental footprint linked to our activities».
That is our present theoretical approach. In order to put it into practice a few months are required: all the operations relating to the transaction are now under consideration by the competent authorities and the closing is expected to be finalized in the fourth quarter of 2017.