Lanxess Shares Drop as Advent Cancels Envalior Purchase
Lanxess shares hit a 17-year low after Advent canceled a 1.2 billion euro deal. The buyout group cited unmet financing conditions for withdrawing from the purchase today.
Shares in Lanxess AG plunged to a 17-year low on Friday after an investment vehicle backed by the European buyout group Advent International called off its planned purchase of the company's remaining stake in a plastics joint venture. The German specialty chemicals manufacturer announced late Thursday that the Advent-backed entity decided against acquiring the nearly 41% stake in Envalior, a transaction that was expected to provide Lanxess with approximately 1.2 billion euros ($1.39 billion) in proceeds.
The market reacted sharply to the announcement, with shares falling 14.36% by mid-morning to their lowest level since March 2009. According to the company, Advent invoked a contractual clause that permitted a withdrawal from the deal if specific financing conditions were not satisfied. This cancellation represents a significant setback for the chemical producer, which had been counting on the divestment to finalize its exit from the engineering materials sector and bolster its liquidity.
