Brenntag to buy speciality chemicals firm Wellstar Group

The Brenntag Group has entered an agreement to acquire specialty chemical distributor Wellstar Group in two steps to support the company's presence in the Asia Pacific region.

Based in Hong Kong, Wellstar Group comprises Wellstar Enterprises and three subsidiaries in Shenzhen, Guangzhou, and Shanghai in China.

Under the terms of the agreement, Brenntag will purchase a 51% stake in Wellstar this year and the remaining 49% by 2021. The firm will also operate Wellstar as a joint venture from 2017 to 2021.

Brenntag Group's Asia Pacific chief executive officer (CEO) Henri Nejade said: “The acquisition perfectly fits into Brenntag’s growth strategy in the Asia Pacific region.

“The company has an experienced sales team with broad experience in the relevant industry and offers strong technical competency and support to customers.

“The investment thus complements Brenntag China’s objective to build up a specialty chemical division for various industry segments, such as coatings and personal care.”

Wellstar Group is involved in the sale and distribution of high-performance pigments, effect pigments, resins, and kaolin for application in cosmetics industry, coatings, inks, and plastics.

Brenntag Group's mergers and acquisitions managing director Anthony Gerace said: “Brenntag considers the joint venture as well-positioned to grow on the back of favourable market trends, such as the growth in automotive industry in China.

“Moreover, the acquisition gives us the opportunity to strengthen our relationship with a strategic key supplier, and we see synergy potential with our existing Brenntag China’s customer base.”

Subject to closing conditions, the first part of the deal is estimated to take place this month.