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Lonza shortlists bidders for specialty ingredients business

December 24/2020

MOSCOW (MRC) -- Lonza has declined to comment on reports that Lanxess and private equity groups including Advent International, Carlyle Group, Partners Group, and a consortium comprising Bain Capital and Cinven have been shortlisted to bid for the Lonza Specialty Ingredients (LSI) division, which is up for sale, reported Chemweek.

Lonza tells CW that it is in discussions with potential buyers, but does not comment on speculation, and that as soon as we have more information, we will share it with the markets.

According to anonymous sources cited in a Reuters report, a total of six companies have been allowed to proceed to the next round of bidding for LSI. Private equity firm Lone Star Funds as well as SK Innovation are mentioned as possible bidders, but it is not clear whether they have been shortlisted, the report says.

Separately, a Bloomberg report says that private equity firms Blackstone Group, CVC Capital Partners, and Clayton Dubilier & Rice are no longer in the running. It adds that no final decisions have been made, and there is no certainty that the shortlisted bidders will make binding offers.

LSI is one of two segments within Lonza. The other is pharma, biotech, and nutrition. Lonza's plans to carve out LSI were first announced in June 2019. LSI is estimated to be worth 3.0-3.5 billion Swiss francs (USD3.4-3.9 billion). 

As MRC informed earlier, Lonza (Basel, Switzerland) says it has developed a new structure for its pharma, biotech, and nutrition (LBPN) segment to increase divisional end-to-end performance accountability and to strengthen governance and process excellence from global functions, as the company proceeds with the previously announced divestment of its specialty ingredients (LSI) segment.

We remind that in 2012, Lonza set up a task force to look at new supply routes and vendors to feed its cracker in Visp, Switzerland, following the shutdown of Petroplus refinery at Cressier in January, 2012. Lonzas cracker has an ethylene capacity of 25,000 tonnes/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
Author:Margaret Volkova
Tags:North America, bioplastics, PP, PE, homopolymer PP, propylene, HDPE, ethylene, petrochemistry, pharmaceuticals, Lanxess, Lonza, SK Corporation, Switzerland.
Category:General News
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