Lonza To Acquire Arch Chemicals

Swiss pharmaceutical supplier Lonza Group Ltd. will purchase biocides company Arch Chemicals Inc. for $1.25 billion in an effort to strengthen its microbial control business.

The combined businesses will create a bacterial-killing products division with sales valued at $1.6 billion, Lonza announced July 11.

The buyout will allow Lonza to broaden its offerings in bacteria-fighting products in the growing hygiene, water-treatment, materials-protection and personal-care industries.

"The acquisition of Arch Chemicals is the next logical step in Lonza's life-science-focused strategy," said Lonza CEO Stefan Borgas in a statement. "It will allow us to expand our non-pharma life science business to achieve a well-balanced profile based upon two world leading growth businesses -- pharmaceutical contract manufacturing and microbial control. The acquisition of Arch Chemicals will further strengthen our position in the attractive microbial control market.”

Lonza noted that the global microbial control market is currently valued at approximately $10 billion and is growing at 4% to 6% per year. The largest microbial-control markets are North America, Europe and Japan. The fastest growing microbial control markets are Brazil, India, China and South Africa.

Norwalk, Conn.-based Arch Chemicals employs approximately 3,000 people. In 2010, the company posted sales of $1.4 billion.

Lonza expects the deal to result in at least $50 million in savings within two years of the completed transaction. By the third year, Lonza expects the deal will boost sales by $ 40 million.

Lonza expects the transaction will result in one-time integration charges of $ 85 million over the next two years.

For more information, visit http://www.lonza.com.

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