June 27 2017, David R Brown
Brenntag strengthens footprint in Asia Pacific by acquiring Chinese specialty chemicals distributor, Wellstar Group
Brenntag, the global market leader in chemical distribution, has signed an agreement to acquire specialty chemical distributor Wellstar Enterprises (Hong Kong) Company Limited, and its 3 Chinese subsidiaries. Brenntag will gain a majority stake of 51% with a first tranche in 2017 and the remaining 49% via the second tranche by 2021. In the period from 2017 to 2021, the business will be operated as a joint venture.
The investment complements Brenntag China's objective to build up a specialty chemical divisionHenri Nejade
Member of the Management Board of Brenntag Group and CEO Brenntag Asia Pacific
Henri Nejade, Member of the Management Board of Brenntag Group and CEO Brenntag Asia Pacific: “The acquisition perfectly fits into Brenntag’s growth strategy in the Asia Pacific region. Wellstar Group represents a competent and well established specialty chemicals organization. The company has an experienced sales team with broad experience in the relevant industry and offers strong technical competency and support to customers. The investment thus complements Brenntag China's objective to build up a specialty chemical division for various industry segments, i.e. Coatings and Personal Care.”
The Wellstar Group, which focuses on the distribution of specialty pigments, resins and additives, is headquartered in Hong Kong and its 3 Chinese subsidiaries are located in Shenzhen, Guangzhou and Shanghai. The company sells and distributes high performance pigments, effect pigments, resins and kaolin used in a broad variety of industries among others in the coatings, inks, plastic and cosmetics industry. In addition, Wellstar Group offers value-added services through an application lab for coatings. In 2016, the business generated total sales of approximately 27.6 million EUR.
Anthony Gerace, Managing Director Mergers & Acquisitions at Brenntag Group: “Brenntag considers the joint venture as well-positioned to grow on the back of favourable market trends, such as the growth in automotive industry in China. Moreover, the acquisition gives us the opportunity to strengthen our relationship with a strategic key supplier, and we see synergy potential with our existing Brenntag China's customer base.”
Headquartered in Mülheim an der Ruhr, Germany, Brenntag is the market leader in chemical distribution and operates a global network of over 530 locations in more than 74 countries. In 2015, the company, which has a global workforce of more than 15,000, generated sales of EUR 10.5 billion (USD 11.6 billion). With over 10,000 products and a world-class supplier base, Brenntag offers one-stop-shop solutions to around 185,000 customers. These include specific application technology, extensive technical support and value-added services such as just-in-time delivery, product mixing, formulation, repackaging, inventory management and drum return handling.
Source(s): Brenntag Press Release