Arch Chemicals, whose business includes Arch Timber Protection, is being acquired by Switzerland-based Lonza for US$1.4bn.
The companies say the deal effectively creates the world’s leading microbial control business.
In a joint statement, the companies said combining the businesses would provide customers with better products and solutions, though Lonza also expects to recoup at least US$50m annually in administraton synergies.
Lonza said the materials protection division is expected to be among the key growth sectors for the combined business, with Brazil, India, China and South Africa the fastest growing markets.
By using both businesses’ technical capabilities, applications expertise and extended reach, Lonza expects to generate increased sales of US$40m by the third year following the acquisition.
“Additional growth synergy will be developed based on increased investments into R&D once the businesses have been integrated,” Lonza said.
Arch Timber Protection’s brands include Tanalised, Tanalith, Vacsol Aqua, Ensele, Dricon, Non-Com and Keywood modified timber.
Lonza’s Life Science ingredients business incorporates a material protection division, which includes chemical solutions to preserve and improve dimensional lumber and engineered wood products.
The Life Science business recorded sales of CHF1bn in 2010, while the group as a whole recorded net sales of CHF2.6bn and net profits of CHF284m.
Arch’s 2010 sales totalled US$1.4bn, of which US$1.2bn were from microbial control products (including timber preservation).
Lonza expects to start a tender offer for Arch shares by July 15 and complete it later this year. The deal is also subject to clearance from competition authorities.
