(Yicai Global) Aug. 13 -- Brother Enterprises Holding will lay out EUR83 million (USD93 million) to take a 100 percent stake in the South African subsidiary of German specialty chemical maker LANXESS.
The acquisition will stabilize its supplies and raise its share of the leather chemical product market, the Haining, Zhejiang province-based vitamin and leather tanning chemical maker announced yesterday
Brother South Africa Proprietary, Brother Enterprises Holding's wholly-owned local unit, penned a Share Purchase Agreement with the seller Lanxess Proprietary yesterday. The purchase price includes the target company's entire equity, intellectual property rights, existing inventory, and current main contracts.
The target's parent, Cologne-based Lanxess, invented the chrome tanning agents used in leather tanning and processing. It has more than 100 years of experience in the production of chromium salts. Lanxess-branded chrome tanning products take the top three slots in the global leather-making market. Its main markets, sales network, and product categories complement those of Brother-branded products. The company will thus be better able to serve the needs of different types of customers after the acquisition, per the statement.
South Africa produces more than half of the world's chromite ore. The Newcastle, South Africa-based target firm is the world's only chromium salt producer close to a mining area, so the acquisition will also guarantee Brother a steady supply of lower-cost raw materials.
Free trade agreements between South Africa and the world's major economies also facilitate Lanxess Cisa Proprietary products' exports to Europe and South America, the statement added.
Editor: Ben Armour