News from Notch Consulting, Inc.

In addition to its possible sale to a new Russian/Polish joint venture (detailed below), there are three major possibilities with regard to Evonik’s divestiture of its carbon black business:

1. Sale to an investment bank (such as Deutsche Bank) and keep as a stand-alone company.
2. Acquisition by another carbon black company. At this point, I have heard rumors involving essentially all major suppliers, but it does appear as though a few producers are seriously investigating an acquisition.
3. Finally, acquisition by or merger with another chemical conglomerate. One logical choice would be Lanxess, which has a similar culture, a complementary product line of rubber chemicals and additives, is interested in acquisitions, and sought to acquire Evonik’s specialty chemical business back in 2007. But Lanxess, which has done wonders with Bayer’s former synthetic rubber business, appears to have removed itself as a bidder for the carbon black business.

European Rubber Journal (subscription required) reported this morning that ZAO Polycarbon, a Russian carbon black producer, and Konimpex, a Polish carbon black distributor, have teamed up to form a joint venture, one of the primary options of which would be the possible acquisition of Evonik’s carbon black business.

ZAO Polycarbon (also known as Omsktechuglerod, or Omsk Carbon Black) is Russia’s largest carbon black producer, with factories in Omsk and Volgograd. Konimpex is its long-term partner for distributing its carbon black to customers in Europe. According to ERJ, “Both partners said they share the same long term development strategy based on continued growth through targeted acquisition.”