Clariant BTP Case Final
Workshop Assignment Two
M&A Case:
Clariant’s Takeover of BTP
Group number 6
28-09-2011
The chemical industry was expanding at a high rate, with a lot of growth potential, and several comparable worldwide rivals. During the years 1990 to 2000 many acquisitions were taking place in the chemical industry and one of the biggest deals was the acquisition of BTP by Clariant. There are several reasons for Clariant to acquire BTP PLC and one of the main important reasons as explained by Clariant's CFO, Reinard Handte, are synergies, which are focused on the potential of both companies. We find it important to mention here that the synergies will be achieved mainly due to revenue enhancement, which might result from cross marketing and network of BTP. Anyways, we believe that there are other reasons for this acquisition, beside synergies, which also help to explain the high premium paid by Clariant.
So, another important reason, for the acquisition is the strategic growth that Clariant is undertaking as of 1999 to double the proportion of its business in strategic growth areas such as life science intermediates within a few years. This reason can be gauged by the slow growth of specialty chemical industry where Clariant operates. Due to the slow growth of this industry Clariant can grow in another industry, where has a passive role such as fine chemical one, by acquiring one of the leading industry companies as BTP is. Another reason for Clariant to do this deal is a forwarding vertical integration with BTP which is achieved due to the strong customer base that BTP has such as DuPont, Roche and Bristol-Myers Squibb. Also improvement of R&D in the fine chemical market can be a significant reason to perform this deal. The chemical industry and mostly the pharmaceutical industry needs large R&D investments and this pushes Clariant to invest and improve its R&D as the fine chemical industry provides ingredients for the pharmaceutical company. Two other important reasons
M&A Case:
Clariant’s Takeover of BTP
Group number 6
28-09-2011
The chemical industry was expanding at a high rate, with a lot of growth potential, and several comparable worldwide rivals. During the years 1990 to 2000 many acquisitions were taking place in the chemical industry and one of the biggest deals was the acquisition of BTP by Clariant. There are several reasons for Clariant to acquire BTP PLC and one of the main important reasons as explained by Clariant's CFO, Reinard Handte, are synergies, which are focused on the potential of both companies. We find it important to mention here that the synergies will be achieved mainly due to revenue enhancement, which might result from cross marketing and network of BTP. Anyways, we believe that there are other reasons for this acquisition, beside synergies, which also help to explain the high premium paid by Clariant.
So, another important reason, for the acquisition is the strategic growth that Clariant is undertaking as of 1999 to double the proportion of its business in strategic growth areas such as life science intermediates within a few years. This reason can be gauged by the slow growth of specialty chemical industry where Clariant operates. Due to the slow growth of this industry Clariant can grow in another industry, where has a passive role such as fine chemical one, by acquiring one of the leading industry companies as BTP is. Another reason for Clariant to do this deal is a forwarding vertical integration with BTP which is achieved due to the strong customer base that BTP has such as DuPont, Roche and Bristol-Myers Squibb. Also improvement of R&D in the fine chemical market can be a significant reason to perform this deal. The chemical industry and mostly the pharmaceutical industry needs large R&D investments and this pushes Clariant to invest and improve its R&D as the fine chemical industry provides ingredients for the pharmaceutical company. Two other important reasons