M&As: Merck to sell pigments business to Chinese firm for EUR665 mn; Aduro plans US IPO

Technology firm Merck has signed an agreement to sell its global Surface Solutions business unit to Global New Material International Holdings Ltd. (GNMI) for EUR665 million in cash. Merck intends to use the net proceeds from the divestment to further strengthen its strategic core businesses. The transaction is expected to close in the course of 2025 and is subject to regulatory approvals and the satisfaction of certain other customary closing conditions.

Surface Solutions offers pigment solutions used in coating, industrial and cosmetic applications. The business unit generated sales of EUR411 million in 2023. Roughly 1,200 employees, approximately 700 of whom are based in Germany, are to be transferred to GNMI as part of the transaction.

GNMI, also known under the brand name Chesir, is one of the largest pearlescent pigment producers. Founded in 2011, the company has sites in China and Korea with approximately 800 employees and is listed on the Hong Kong stock exchange. GNMI has profound expertise in effect pigments and the rapidly growing and competitive field of mica-based products.

GNMI is planning for the Surface Solutions business unit to have three regional headquarters with one each in Germany, the US and Asia, while maintaining its existing production facilities in Gernsheim, Germany, Onahama, Japan, and Savannah, Georgia, US. Merck will remain the owner of the property at the Gernsheim site with a long-term lease contract with GNMI and a clear separation plan for the area used by Surface Solutions. The GreenTech Park Fluxum in Gernsheim is not affected by the sale.

“The divestiture of the Surface Solutions business unit will further sharpen our focus on high-tech applications in Electronics, such as driving the development of next-generation chips as an integrated solutions provider for our semiconductor customers,” said Belén Garijo, Chair of the Executive Board and CEO of Merck. “GNMI and our Surface Solutions business will join forces and combine their strengths to form an even stronger team, delivering excellence in the pigments industry.”

“Merck’s Surface Solutions unit and GNMI share the philosophy of growing a customer-centric business. Our activities are highly complementary in terms of products, expertise and regional footprint. By joining forces, we will be excellently positioned to jointly drive growth in a very dynamic market segment. The combined businesses will provide even more customer proximity with a presence in every region along with an even broader product portfolio that stands for quality and reliability,” said Ertian Su, ChairmaN/CEO of GNMI.

To prepare for the completion of the sale, an integration team comprising representatives of both companies will be set up to define how the strengths of both businesses can best be combined.

The sale of Surface Solutions does not yet comprise the French Surface Solutions business, where GNMI has made a binding offer to acquire the relevant shares and assets once Merck has informed and consulted with the relevant works council representatives.

 In other news, Canadian clean technology company Aduro Clean Technologies Inc. says that it has publicly filed a registration statement on Form F-1 with the Securities and Exchange Commission (SEC) relating to a proposed initial public offering (IPO) of its common shares in the US.

In connection with the Offering, Aduro has also applied to list its common shares on the NYSE American exchange. The number of shares to be offered and the offering price have not yet been determined. It is expected to take place after the SEC completes its review process, subject to market and other customary conditions, and there can be no assurance as to whether or when the fffering may be completed, as to the actual size or terms of the Offering, or whether the common shares will be accepted for trading on the NYSE.

In addition to, and in preparation for, the new listing on NYSE, and subject to approval by the Canadian Securities Exchange, Aduro says it will undertake a consolidation of its issued and outstanding common shares at a consolidation ratio to be determined in the coming weeks.

The common shares of the proposed offering referenced above are not being offered to residents of Canada or persons in Canada. The common shares are being sold based on prospectus exemptions under applicable Canadian securities laws, and on the basis that the securities will not be distributed back into Canada.

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