KLK proposed to acquire Dutch chemical assets for RM187m

By MARK RAO / Graphic By TMR

Kuala Lumpur Kepong Bhd (KLK) has proposed to acquire the entire stake in Elementis Specialties Netherlands BV (ESN) for €39 million (RM187.2 million), a move that would allow access to the Dutch company’s surfactant chemical assets and business in Delden, Netherlands.

In an exchange filing yesterday, the Perak-based oil palm company said it had tabled the offer to acquire ESN’s entire 3,404 ordinary shares at €1,000 each via its wholly owned unit Kolb Distribution AG.

The proposed acquisition is also expected to present an opportunity to expand Kolb’s product range and market coverage.

“The use of ESN’s Delden site as another hub for the KLK group’s market penetration strategy will further accelerate the growth in the group’s downstream chemical specialties business in Europe,” the exchange filing read.

The Delden production site is serviced by good rail and road links, and is located strategically close to key customers and raw material supply routes.

KLK added that its chemical business will benefit from ESN’s large established customer base.

ESN is part of the Elementis plc group and is the asset owner of the Delden-based plant which manufactures all of the latter’s surfactant products.

Upon the successful completion of the acquisition, the Delden site will continue to supply a range of specialty chemicals to Elementis Specialties Inc under a long-term supply agreement.

The takeover offer comes after KLK failed in its RM2.32 billion bid to acquire the entire interest in the London-listed MP Evans plc in December last year.

KLK sought to gain access to MP Evans’ plantation assets in Indonesia which are located in the North Sumatra, South Sumatra, Aceh, Bangka-Belitung and East Kalimantan provinces.

On Dec 31 last year, MP Evan’s landbank measured some 27,407ha in total planted area.

Meanwhile, KLK’s landbank reportedly stands at over 270,000ha and is spread across Malaysia, Indonesia and Liberia. The company is also engaged in the oleochemicals and property sectors.

For the ESN acquisition, KLK said it intends to fund the RM187.2 million acquisition via a combination of existing cash reserves and bank borrowings.

The deal is expected to be finalised by the first half of next year.

KLK share price closed two sen higher at RM24.4 yesterday, as 540,000 shares exchanged hands for a RM25.86 billion market capitalisation.