The Rhein-Ruhr consortium, a grouping of seven municipal utility companies in Germany's Ruhr region, has agreed to acquire a 51% stake in Evonik Steag, the energy subsidiary of Evonik Industries, for european dollar 649 million. The deal is expected to close at the end of the first quarter of 2011, subject to all necessary approvals. Evonik has also agreed to sell the remaining 49% of Evonik Steag to the consortium for european dollar 594 million after a retention period of up to five years. Evonik announced one year ago that it planned to split off its real estate business and Evonik Steag, as part of a strategy to focus on chemicals.The company said it would seek investors in Evonik Steag, which would be managed as an independent subsidiary. Selling the 51% interest in Evonik Steag "is an important step in our repositioning as a specialty chemicals group," Evonik chairman Klaus Engel says. "The proceeds of the transaction will be used for a value-enhancing expansion of the chemicals business and to improve Evonik's finan- cial profile," he says. Chemicals account for about 80% of Evonik's sales and Ebitda, prior to the divestment of the Evonik Steag shares, Engel says. Separately, Evonik says it intends to construct a plant that will make isophorone and isophorone diamine at a yet-to- be-decided location, most likely in Asia. The board of the Evonik Degussa subsidiary has approved the project plan and production is scheduled to start in 2013. "We're particularly looking at attractive investment climates in Southeast Asia and China, and will take these into consideration when taking the final decision," says Gerd Brand, head of Evonik's crosslinkers business line. Evonik currently has isophorone production at Herne and Marl, Germany; Antwerp; and Mobile, AL. "The market for isophorone and its derivatives is growing steadily and proved to be robust even during the economic crisis," says Evonik chairman Klaus Engel. The planned investment would create a framework for a possible expansion of Evonik's product range in isophorone chemistry, the company says. Evonik says it is the only company to produce the entire isophorone line, consisting of isophorone, isophorone diamine, isophorone diisocyanate, and derivatives. They are used as components in products with applicationsthat include industrial flooring, artificial leather, paints and coatings, and high-performance composites.
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