LANXESS Aktiengesellschaft (XTRA:LXS) is working together with the financial investor Advent International Corporation on a bid for the plastics business of the Dutch competitor Koninklijke DSM N.V. (ENXTAM:DSM) . The Handelsblatt learned this from financial and corporate circles. The division is therefore worth around three billion euros.

Lanxess is currently outsourcing similar activities of its own to an independent company called HPM. The DSM division is to be combined with this later. The new company should form a core for further acquisitions in the market, said several people familiar with the plans.

DSM Engineering Plastics Inc. and Lanxess HPM both have a strong focus on equipping the automotive industry. The merger of the divisions of DSM and Lanxess is aimed at economies of scale, cost reductions and sufficient financial strength for further acquisitions, according to the circles. The plastics division of DSM, which is currently for sale, is significantly larger than that of the Cologne-based company, with sales expected for 2021 of around two billion euros.

But these are still only plans, the sales process has not yet started. DSM has announced the separation of its Materials division in September 2021. Potential buyers could value the division, which has an Ebitda of around 120 million euros, at up to 1.7 billion euros, according to people familiar with the matter.

In the next few days they should receive detailed information packages. The auction for the plastics unit Engineering Plastics starts later. According to financial circles, the competitor Celanese Corporation (NYSE:CE) from the USA, Ube Industries, Ltd. (TSE:4208) from Japan and investors such as SK Capital Partners or the chemical-affiliated investment company Apollo Investment Corporation (NasdaqGS:AINV) are interested.

The companies declined to comment or were previously unavailable.