Brenntag acquires in two steps Zhong Yung (International) Chemical Ltd, a chemical distributor with expected sales of EUR 255 million in 2011.
Brenntag, global market leader in chemical distribution, signed a purchase agreement to acquire 100% of Zhong Yung (International) Chemical Ltd. Deal closing for the first tranche is expected in the 3rd quarter of this year. Brenntag will hold a majority stake of 51% and will acquire the remaining stake in 2016. Entering into a joint venture for five years gives Brenntag the opportunity to use the experience and know-how of Zhong Yung and its management team to establish a solid business platform for Brenntag in China.
“This transaction strengthens Brenntag’s growth strategy in the Asia-Pacific region. This acquisition is a strategic investment for Brenntag in China and also a first step through which Brenntag demonstrates full commitment to build a solid distribution network in China. We are continuing to look for further opportunities to support our growth in Asia Pacific.” says Brenntag’s COO and designated CEO Steve Holland.
Henri Néjade, President of Brenntag Asia Pacific, highlights: “It is a significant milestone in Brenntag’s Asian business development following the successful acquisition of EAC Industrial Ingredients in 2010. We are delighted to team up with Zhong Yung because it opens the opportunity for further growth in China. Zhong Yung is a major chemical distributor with about 2,000 customers, more than 100 suppliers and has an excellent infrastructure including laboratories, blending and storage capabilities.”
Zhong Yung is a major chemical solvent distributor and serves all major solvents-applied industries such as paint and coatings, adhesives, printing inks, electronics and automotives with a large variety of solvent products. Zhong Yung has a strong national sales organization covering North, East and South of China representing a large geographical coverage of the total domestic solvents market demand in China. The company has a strong market position supported by its own high standard storage and blending facilities, empowering distribution value added services to its business partners in China. The company is estimated to generate sales of EUR 255 million in 2011.
Brenntag achieves strategic market entry in China