A number of companies had bid for Dynamit, including BASF, DSM, Clariant and General Electric, but the winning team was Kohlberg Kravis Roberts, bidding along with Credit Suisse First Boston's private equity business. KKR has said it wants to combine Dynamit with its own Rockwood Specialties unit.
Dynamit Nobel makes a broad range of fine chemicals used by the chemical and pharmaceutical industries, but its activities in plastics are not included in the €2.23 billion sale, because these activities are focused on the automotive industry
MG Tech said that the four units being sold - CeramTec, Chemetall, Sachtleben and DNES - generate around €1.5 billion in sales and contributed more than 75 per cent of Dynamit's earnings before interest, taxes, depreciation and amortisation (EBITDA) in 2003.
Last October, MG said that it did not have the resources to develop both its chemical and engineering businesses, and would use its exit from the chemicals sector - carried out via the sale of Dynamit and its Solvadis unit - to fund expansion in engineering. The group is still in the process of selling Solvadis.
At the heart of the trimmed-down group will be GEA, which supplies process technology and components for the pharmaceutical, food and petrochemical industries. MG is hoping to complete the sell-off in 2004 and raise €2.5 billion from the transaction.
The consortium plans to fold the four units acquired into Rockwood Specialties, creating a specialty chemicals firm with combined annual sales of $2.5 billion, Rockwood said in a separate statement. The company had turnover of around $760 million last year. And the newly created company will have around 10,000 employees, compared to Rockwood's current work force of about 2,500.