Lanxess AG and Advent International have detailed the structure and leadership of their High Performance Engineering Materials joint venture.

The new business is being formed by combining existing Lanxess units with businesses acquired from Royal DSM NV. Lanxess of Cologne, Germany, and global private equity firm Advent of Boston are purchasing DSM's engineering materials business for almost $4 billion in a deal that was announced in May. Plastic Sheet

The JV named Calum MacLean as CEO-designate in September. In an Oct. 10 news release, officials confirmed additional details.

The JV will be organized into three global business divisions: Performance Materials, Specialty Materials and Intermediates. The JV expects to establish a small head office around Düsseldorf, Germany, and will be supported by locations in Geleen, Netherlands, and Dormagen, Germany.

Stephen Bennett will serve as the JV's chief financial officer. Other appointments include Peter-Hanjo Homberg of Lanxess, executive vice president, strategy and transformation; Anneleen Drieskens of DSM, executive vice president of human resources; Caroline Mitterlehner of DSM, executive vice president of specialty materials; and Peter Henrichfreise of Lanxess, executive vice president of intermediates.

"Preparation for day one of this exciting High Performance Engineering Materials joint venture is taking shape," said MacLean, who has more than 30 years of plastics and chemicals experience, most recently as CEO of British materials firm Synthomer plc.

"The preparation of an integrated face to the market of the combined businesses and the appointment of the first designated senior executives is a major step to hitting the ground running on completion," he added.

The business being acquired has annual sales of about $1.6 billion. Officials said the business is a leading global supplier in high-performance specialty materials for electronics, electrical and consumer goods.

Lanxess is contributing its High Performance Materials unit to the JV. HPM is a leading supplier of high-performance polymers, primarily to the automotive sector. That business has annual sales of around $1.6 billion.

Advent will hold at least 60 percent in the joint venture. Lanxess will receive an initial payment of at least $1.2 billion and a stake of up to 40 percent. The firm will use proceeds from the transaction to reduce debt and to strengthen its balance sheet.

Lanxess also has the option to divest its stake in the joint venture to Advent at the same valuation after three years. The deal is expected to close in the first half of 2023.

The DSM unit makes nylon, PET, polybutylene terephthalate, copolyester and other materials. It employs 2,100 worldwide at eight production sites and seven R&D centers.

The JV will include DSM sites in Geleen and Emmen, Netherlands; Shangyu and Jiangyin, China; Pune and Pantnagar, India; Genk, Belgium; Kaohsiung, Taiwan; and Evansville, Ind. Lanxess sites included in the JV are in Brilon, Hamm-Uentrop and Krefeld-Uerdingen, Germany; Wuxi and Changzhou, China; Antwerp, Belgium; Jhagadia, India; Porto Feliz, Brazil; and Gastonia, N.C.

At Lanxess, the HPM unit makes nylon 6 and PBT resins and thermoplastic fiber composites. The unit employs 1,900 at 10 production and seven R&D sites worldwide. Lanxess is a maker of specialty chemicals and plastics that employs almost 15,000 and posted sales of around $6 billion in 2021.

Advent has $88 billion in assets under management. Its holdings include German acrylic resin maker Röhm GmbH.

The sale to Lanxess continues an eventful year for DSM. In April, the firm sold its protective materials business to Avient Corp. of Avon Lake, Ohio, for nearly $1.5 billion.

In February 2021, Lanxess bought specialty chemical producer Emerald Kalama Chemical BV of Vancouver, Wash., for almost $1.1 billion. Lanxess acquired Emerald Kalama from Emerald Performance Materials LLC, which is majority-owned by U.S. private equity firm American Securities LLC.

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