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FIRM IN TALKS WITH LANXESS

Saudi Aramco eyes German rubber unit stake

FRANKFURT, February 9, 2015

German chemical company Lanxess is in talks with potential buyers including state-owned Saudi Arabian Oil Company (Saudi Aramco) for the sale of a minority stake in its synthetic-rubber unit, reported the Bloomberg, citing two sources.

The report said that two proposals had already been submitted, with one party interested in a stake of about 40 per cent.

Shares in Lanxess rose to their highest level in four and a half months on Monday following the reports.

Shares in Lanxess were 1.6 per cent higher at 45.39 euros by 1432 GMT, at their highest since late September and outperforming a 1.7 per cent fall of Germany's blue-chip index.

However, Lanxess and Saudi Aramco declined to comment on the report.

Chief executive Matthias Zachert, who took over in April last year, started a restructuring programme at Lanxess, the world's biggest maker of synthetic rubber for car tyres, to cut investments and development expenses to preserve cash.

As part of that process, he has been searching for a strategic partner for a production or marketing alliance, to jointly tackle production overcapacity and weak prices in the synthetic rubber industry.

Asian rivals are challenging the company's dominant position in synthetic rubber, planning to bring more capacity on stream this year.

Two people close to Lanxess who asked not to be named said the group was considering a range of options including a sale of the rubber unit.-Reuters




Tags: Saudi Aramco | Germany | Stake |

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