Steven Holland, CEO, Brenntag Group. (File photo)
Brenntag, the global chemical distributor, has signed an agreement to acquire in 2 steps 100% of the shares in specialty chemical distributor Wellstar Enterprises (Hong Kong) Company Limited, Hong Kong, and its 3 Chinese subsidiaries, jointly “Wellstar Group”.
Brenntag will gain a majority stake of 51% with a first tranche in 2017 and the remaining 49% via the second tranche by 2021. In the period from 2017 to 2021, the business will be operated as a joint venture.
Wellstar Group focuses on the distribution of specialty pigments, resins and additives mainly across China and perfectly fits into Brenntag’s growth strategy in the Asia Pacific region, according to Henri Nejade, Member of the Management Board of Brenntag Group and CEO Brenntag Asia Pacific. It also complements the Brenntag China’s objective to build up a specialty chemical division for various industry segments, i.e. Coatings and Personal Care.”
Wellstar Group is headquartered in Hong Kong with its 3 Mainland China subsidiaries located in Shenzhen, Guangzhou and Shanghai. The company sells and distributes high performance pigments, effect pigments, resins and kaolin used in a broad variety of industries among others in the coatings, inks, plastic and cosmetics industry. In addition, Wellstar Group offers value-added services through an application lab for coatings.
“Brenntag considers the joint venture as well-positioned to grow The acquisition gives us the opportunity to strengthen our relationship with a strategic key supplier, and we see synergy potential with our existing Brenntag China’s customer base,” says Anthony Gerace, Managing Director Mergers & Acquisitions at Brenntag Group.
Brenntg has generated total sales of approximately 27.6 million EUR. Closing of the first tranche is expected to occur in the course of the next weeks, subject to contractually agreed closing conditions.