Swiss chemical company Clariant AG (CLN) is in advanced talks to combine its leather-treatment unit with a competing business of French private-equity firm Wendel SA (MF), two people familiar with the matter said.
A deal with Wendel, which owns leather chemical company Stahl, may be announced as soon as tomorrow, said the people, who declined to be identified because the talks are private. Both sides are negotiating final details and a deal may still not happen, they said. Representatives for Clariant and Wendel declined to comment on a potential deal.
The transaction would create an enlarged leather-chemical company with total sales of about 580 million euros ($798 million) and scope to cut costs and target more clients in industries spanning shoes, bags and luxury car upholstery. For Clariant, a deal would boost Chief Executive Hariolf Kottmann’s drive to exit commodity chemicals and focus on more profitable areas like agrochemicals and ingredients for shampoos and moisturizers.
Clariant, which is scheduled to report third-quarter earnings tomorrow, this month already agreed to sell a unit making detergent and intermediate chemicals. The leather unit, which has 12 production sites and employs about 700 people, also attracted offers from private-equity companies including Black Diamond Capital Management LLC and SK Capital Partners LP, people familiar with the matter said last week.
Clariant and Stahl, along with BASF SE (BAS), Black Diamond’s TFL Holding and Lanxess AG (LXS), are among the world’s five biggest suppliers of treatments that prepare hides for car seats, bags and shoes. Stahl said in August that it continues to “seek out consolidation opportunities.”
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