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Clariant buys BTP for $1.8B
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January 24, 2000: 4:08 a.m. ET
Swiss chemicals firm buys Britain's BTP as industry consolidation continues
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LONDON (CNNfn) - Switzerland's Clariant agreed Monday to buy U.K. specialty chemicals maker BTP for about 1.1 billion pounds ($1.8 billion) in cash, marking further consolidation in the chemicals business.
Clariant, a world leader in the specialty-chemicals industry, is offering 600 pence for each BTP share. That's about 73 percent above BTP's price before Clariant said last week it was in talks about a deal. That announcement sparked a 26 percent jump in
BTP shares Thursday.
In early London trading Monday, BTP (BTP) rose another 12 percent to 589 pence, while Clariant was unchanged at 728 Swiss francs in Zurich.
Analysts said the deal will boost Clariant's presence in Britain. Clariant said the U.K. company will give it more exposure to the market for leather chemicals, building on its existing efforts with BTP in that area.
Clariant said it expects the purchase to add to its earnings, after goodwill amortization, by the end of 2001. Clariant has roughly 30,000 employees; BTP has a workforce of 2,800, the companies said.
"The combination of BTP and Clariant's fine-chemical activities will create one of the leading fine-chemicals businesses in the world," Clariant Chairman and President Rolf Schweizer said in a statement.
"The acquisition is fully in line with Clariant's strategy, outlined in 1999, to double the proportion of its business in strategic growth areas such as life science intermediates within a few years," he said.
More takeovers and mergers among chemicals firms could be in the pipeline, an analyst said.
"There is probably going to be more consolidation in the sector - the industry is still quite fragmented," said Hans Zayed, an analyst with Paribas, who has a "no action" rating on Clariant shares.
Zayed said Clariant's offer of 600 pence amounted to "a fair price. BTP's share price was depressed. It just looks high compared to where it was." 
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