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JPMorgan’s One Equity Said to Plan Sale of Columbian Chemicals

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Dec. 3 (Bloomberg) -- One Equity Partners LLC, the buyout arm of JPMorgan Chase & Co., plans to sell U.S. carbon black manufacturer Columbian Chemicals Co., said two people with direct knowledge of the matter.

India’s Aditya Birla Group is among potential bidders for the world’s third-largest maker of the material used in tires and synthetic rubber, said one of the people, declining to be identified because the matter is confidential. A transaction may be valued at more than $500 million, the person said.

Columbian Chemicals, based in Marietta, Georgia, may compete for bidders with the carbon black unit of Germany’s Evonik Industries AG. Billionaire Kumar Mangalam Birla’s company and India’s Phillips Carbon Black Ltd. are considering making offers for Evonik, the world’s No. 2 maker of carbon black, in a deal likely to be valued at more than $700 million, two people familiar with the matter said earlier this week.

Pragnya Ram, a Birla Group spokeswoman in Mumbai, declined to comment on “market speculation.” JPMorgan spokesman Justin Perras also declined to comment.

Columbian Chemicals is the world’s third-largest maker of carbon black behind Cabot Corp. and Evonik, according to a Standard & Poor’s report in October. The closely held company has a market share of about 9 percent, and the three biggest companies jointly account for about one-third of worldwide capacity, the ratings company said.

Columbian Chemicals operates 11 plants in nine countries including U.S, Canada, Brazil, Germany, Spain, South Korea and China, according to its website. Carbon black is a material used to increase durability of tires, paints and plastics.

Four Nations

The Birla Group is the world’s fourth-largest producer of carbon black with operations spread across four units including Alexandria Carbon Black Co. in Egypt; Hi Tech Carbon, a division of Aditya Birla Nuvo Ltd. in India; Thai Carbon Black Public Co. in Thailand and Liaoning Birla Carbon Co. in China, according to its website.

DC Chemical Co., a South Korean maker of petrochemicals and solar-power components, and One Equity Partners jointly bought Columbian Chemicals for about $600 million from Phelps Dodge Corp. in 2006. One Equity agreed to acquire DC Chemical’s 67 percent stake for about $150 million in January 2009.

One Equity, established in 2001, manages $8 billion of investments for New York-based JPMorgan in direct private-equity transactions, according to its website.

Evonik, which has operations in 12 countries, said its global production capacity will reach more than 1.4 million metric tons a year by end of 2010, according to a statement in June.

To contact the reporter on this story: George Smith Alexander in Mumbai galexander11@bloomberg.net.

To contact the editor responsible for this story: Jeffrey St.Onge jstonge@bloomberg.net

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