Bidders gather in MG chemicals auction

Related tags Kohlberg kravis roberts

A US-based private equity firm is the latest to join the list of
bidders for Dynamit Nobel, the chemicals business being sold by
German chemicals and engineering group MG Technologies.

Apollo Management joins a string of other financial groups trying to get hold of parts of MG's chemicals business, which spans speciality chemicals, custom synthesis, ceramics and plastics. Other bidders are thought to include Bain Capital/Permira of the UK and Goldman Sachs Capital Partners/CVC, according to a report in the Financial Times.

In December, German chemicals major BASF threw its hat into the ring, joining other companies rumoured to include Dutch group DSM as well as Switzerland's Clariant and the US General Electric group. And in the same month MG agreed to sell rubber trader and specialty chemical distributor Safic-Alcan to French financial investors, an additional step on its path towards becoming a focused engineering firm.

Last October, MG said that it does not have the resources to develop both its chemical and engineering businesses, and will use its exit from the chemicals sector - carried out via the sale of Dynamit Nobel and its Solvadis unit - to fund expansion in engineering. At the heart of the trimmed-down group will be GEA, which supplies process technology and components for the pharmaceutical, food and petrochemical industries. MG hoping to complete the sell-off in 2004 and raise €2.5 billion from the transaction.

Meanwhile, another potential buyer is Kohlberg Kravis Roberts, bidding along with Credit Suisse First Boston's private equity business. KKR is keen to buy Dynamit Nobel and combine it with its own Rockwood Specialties unit.

Bids for the second round of the auction are due at the end of the month.

Meanwhile, MG's GEA group has bought Goedhart Holding, a Dutch company specialising in industrial refrigeration, for an undisclosed sum.

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