Clariant Drops as Evonik Owner Shoots Down Deal Speculation

Clariant AG, the Swiss chemicalmaker cited as a potential takeover target for Evonik Industries AG, dropped in Zurich trading after an executive at the foundation controlling the German company downplayed speculation of a takeover bid.

Werner Mueller, chief executive officer of RAG Stiftung, which owns 68 percent of Evonik, said he doesn’t see an acquisition of Clariant on the cards. Clariant traded 5.9 percent lower at 19.48 Swiss francs as of 12:49 p.m. local time.

“If Evonik’s board planned do to something like this, it would need to convince its shareholders why such a deal would boost growth and add value,” Mueller told reporters in Essen. “We can turn the page on this issue.”

Evonik is under no pressure to undertake an acquisition, though it has the blessing of RAG should it opt to do so, Mueller said. Evonik is seeking to accelerate growth through acquisitions and has also expressed interest in Dutch chemical maker Royal DSM NV, people familiar with the situation said last year. DSM, based in Heerlen, the Netherlands, traded 0.5 percent lower in Amsterdam.

Evonik Chief Financial Officer Ute Wolf said in May the company won’t be tempted into a reckless acquisition even as non-organic growth is needed to meet the German chemical company’s ambitions for expansion.

Mueller said Tuesday he expects Evonik to become a member of the German benchmark DAX index before his tenure at RAG Stiftung ends in November 2017, as he expects the company’s free float to climb to more than 30 percent in that year.

Takeover Speculation

Clariant, based in Muttenz, has long been considered a takeover target, yet speculation about incoming offers has intensified in the last year, with Evonik and Dow Chemical Co. cited in media reports as potential acquirers.

While Clariant has repeatedly said it wants to stay independent, the Swiss company’s refocus on catalysts and chemicals for personal-care and household goods, and its potential for margin improvement, makes it an attractive target, Berenberg’s analysts said in April.

Clariant in April reported its first positive cash flow in the January to March period in about five years, helped by a range of new products. After years of portfolio change, Chief Executive Officer Hariolf Kottmann has an opportunity to catapult Clariant into the “big league” of specialty chemical companies by spurring sales growth via research, improving margins, and bringing a fresh strategic vision to parts of the business run for cash, according to Berenberg.

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