The Background Brother is a Chinese listed Company and a leading player of chrome powder (CTS) and vitamin K3 in China as well as globally. The supply stability and competitive cost position in respect of Sodium dichromate (SDC), as the main raw material of both K3 and CTS, play vital roles in improving customer service and being more competitive in these featured products. Due to this acquisition, Brother is able to perform vertical integration along the industry’s value chain and strengthen its global reach significantly.

The Deal Specialty chemicals company LANXESS is selling its chrome chemicals business with main operations in South Africa to Brother Enterprises, a Chinese leather chemicals producer. Both companies have signed a respective agreement on August 12th, 2019. The transaction was still subject to approval by the relevant antitrust authorities which has been granted on January 9th and the deal was closed on January 10th, 2020. IEG – Investment Banking Group has acted as exclusive financial advisor to Brother Enterprises during this cross-border transaction. Robert Shan, Managing Director at IEG in Shanghai, states: “It was a strategic decision of Brother and an exemplary global success of a Chinese company through a bidding process. With this transaction, Brother will become the global leader in respective leather chemical and pharmaceutical business.”

The Partners LANXESS is a leading specialty chemicals company with sales of EUR 7.2 bn in 2018. The company currently has about 15,400 employees in 33 countries and is represented at 60 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals, and plastics. Brother Enterprises is a China-based company principally engaged in the research, development, manufacturing, and sale of new fine chemical products, including vitamin and leather chemical products.

The Perspective About the future of the chrome chemicals business Matthias Zachert, Chairman of the Board of Management of LANXESS, states: “We have successfully reorganized our chrome chemicals business in recent years. However, it no longer fits in our strategic focus on specialty chemicals. We are therefore convinced that future growth and the further development of the business can be better implemented under the leadership of Brother Enterprises.”