German chemicals firm Lanxess to buy US rival for 2.4 bn euros

German speciality chemicals maker Lanxess has said Monday it plans to buy US rival Chemtura for 2.4 billion euros ($2.7 billion) in its push to become a global leader in the growing additives business.

Lanxess said it was particularly drawn to Chemtura's "competitive position" in the market for industrial lubricants, which are used in power generation and aviation, as well as its role as a major provider of flame retardant additives.

The deal, which marks Lanxess's largest acquisition to date, will see the German firm pay Chemtura $33.50 per share, nearly 19 percent more than the American company's closing price on Friday.

"With this acquisition, we are forming a champion in the field of additives and are strengthening our already profitable portfolio," Lanxess's board of management chairman Matthias Zachert said in a statement.

Lanxess said the tie-up, to be funded through a combination of debt and cash, should lead to annual savings of 100 million euros by 2020.

The deal, still subject to regulatory approval, is expected to be finalised by mid-2017, the statement added.

It is the latest in a wave of consolidations in the chemical industry as major players grapple with low commodity prices and sluggish global growth.

Cologne-based Lanxess, a former unit of Bayer, has been undergoing significant restructuring since it moved its synthetic rubber making division into a joint venture with Saudi Aramco.

Lanxess has some 16,700 employees worldwide and reported sales of 7.9 billion euros last year.

Philadelphia-headquartered Chemtura has annual revenues of around $1.5 billion and some 2,500 employees.