GNMI to Acquire Merck's Pigments Business for EUR 665 Million
Merck has signed an agreement to sell its global Surface Solutions business unit to Global New Material International Holdings Ltd. for EUR 665 million in cash.
Merck plans to use the net proceeds from the divestiture to further strengthen its core strategic business areas. Bélén Garijo, Chair of the Board of Management and CEO of Merck, said, "The divestiture of our Surface Solutions business unit will sharpen our focus on high-tech applications in Electronics, such as fostering the development of next-generation chips as an integrated solution provider for our semiconductor customers. GNMI and our Surface Solutions business will combine their strengths to create an even stronger team and deliver excellence in the pigments industry."
Kai Beckmann, Member of the Board of Management and CEO of the Electronics Division of Merck, said, "The combination of Surface Solutions and GNMI will strengthen the business's competitive power and thereby provide better prospects for employees and customers. At the same time, this transaction gives us the opportunity to focus more intensively on the semiconductor and display industries within Electronics."
"Merck's Surface Solutions unit and GNMI share a customer-focused business growth philosophy. Our operations are highly complementary in terms of products, expertise and regional footprint. By combining our strengths, we will be well positioned to achieve joint growth in a highly dynamic market segment. The combined business will bring customers even closer through a broader product portfolio representing quality and reliability, as well as presence in every region. We are impressed by the commitment, experience and expertise of Surface Solutions employees and we look forward to welcoming our future colleagues to the company. This combination will provide attractive long-term prospects for career development, including job guarantees for employees in Germany and a site guarantee for Gernsheim through 2032. This is a clear sign of how much we value the business and its employees."
Surface Solutions provides pigment solutions for coatings, industrial and cosmetic applications. This business unit achieved sales of EUR 411 million in 2023. Approximately 1,200 employees, of whom approximately 700 are based in Germany, will transfer to GNMI as part of the transaction.
GNMI, also known by the Chesir brand, is one of the largest pearl pigment manufacturers. Founded in 2011, the company has facilities in China and Korea, approximately 800 employees and is listed on the Hong Kong Stock Exchange. GNMI has deep expertise in effect pigments and rapidly growing and competitive mica-based products. The company has deep understanding of Asian and particularly Chinese markets, especially in pearl pigments, industrial coatings and plastics. It also specializes in optimized profitability through rapid commercialization and economies of scale.
To prepare for completion of the sale, an integration team composed of representatives from both businesses will be established to define how best to combine the strengths of both operations. Additionally, GNMI plans for Surface Solutions to have three regional centers, one each in Germany, the United States and Asia, and to maintain existing manufacturing facilities in Gernsheim, Germany, Onahama, Japan and Savannah, Georgia, USA. Merck will remain the owner of the property in Gernsheim with a long-term lease agreement with GNMI and a net separation plan for the space used by Surface Solutions. The GreenTech Park Fluxum in Gernsheim will not be affected by the sale.
The transaction is expected to be completed in 2025 and is subject to regulatory approvals and certain other customary closing conditions. The sale of Surface Solutions does not yet include the French Surface Solutions business, for which GNMI has made a binding offer to acquire the respective shares and assets, following Merck's informing and consulting with the relevant works council representatives.
https://www.merckgroup.com/press-releases/2024/jul/en/Divestiture-Surface-Solutions-EN.pdf
New Polymer for Reflective Roof Coatings with Enhanced Soiling Resistance
Mitra Future Technologies, Inc. ("Mitra Chem"), an innovator in lithium-ion battery materials compliant with the Inflation Reduction Act, and Sun Chemical, a multinational specialty chemicals company and the world's largest pigment manufacturer, have announced a joint project to develop North America's first iron phosphate production capacity alongside Mitra Chem's lithium iron phosphate manufacturing. Mitra Chem and Sun Chemical will combine their unique and complementary expertise and innovative processes to produce battery-grade iron phosphate at scale from domestic raw materials. Sun Chemical will leverage its 100 years of advanced particle engineering, manufacturing and production efficiency expertise, existing regulatory approvals and comprehensive US manufacturing infrastructure. Mitra Chem will provide its state-of-the-art laboratory in Silicon Valley and an acceleration platform leveraging machine learning and automation to unlock high-efficiency development and materials testing at ten times the speed of current industry practices. The companies have already obtained an iron phosphate proof of concept and are optimizing a zero-waste process.
Russell Schwartz, Chief Technology Officer of Sun Chemical, said, "Sun Chemical is excited to work with Mitra Chem, as we have validated that cutting-edge approaches to LFP design produce LFP with extraordinary properties. Furthermore, close collaboration with Mitra Chem will help renew a manufacturing process for affordable LFP precursors from domestically sourced raw materials."
Vivas Kumar, CEO of Mitra Chem, said, "This partnership marks a turning point in the US design, innovation and manufacturing of critical EV battery components. Sun Chemical is a pioneer in high-quality pigment technologies for the automotive industry, with design and manufacturing processes based on those similar to iron phosphate, and together we are positioned to enable the US to maintain its leadership in the most advanced supply chain for next-generation vehicles and energy storage."
This groundbreaking partnership represents a significant step in building a cleaner, safer, faster and China-independent, resilient domestic EV battery supply chain. To date, 100% of battery-grade iron phosphate (FP) and lithium iron phosphate (LFP) is produced outside the United States and 99% comes from China. This situation forces battery and vehicle manufacturers to be overly dependent on fragile supply chains often burdened by low environmental and safety standards. When Sun Chemical's existing equipment and co-location scaling expertise is combined with Mitra Chem's product optimization capabilities, it will deliver a localized supply chain meeting the technical requirements of cell and automotive customers for high-density LFP. Co-location of Sun FP and Mitra Chem LFP production will provide additional efficiency gains.
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