Bloomberg News

Evonik Owners Push Ahead With Share Sale After Business Improved

May 21, 2012

Evonik Industries AG, Germany’s second-largest chemical company, will push ahead with plans for an initial public offering on optimism an improved outlook for profit will eclipse turmoil in equity markets.

The board of trustees of RAG Stiftung, which owns 74.99 percent of Evonik, opted to proceed with a share sale following a meeting today although it may reconsider the timing, it said in a statement. The company said in March it was aiming for an IPO in the first half. CVC Capital Partners Ltd. also plans to sell its 25.01 percent stake and end a four-year involvement in the maker of additives and specialty plastics used in car parts.

Evonik raised its full-year profit and sales forecast earlier this month, benefiting from increased demand for ingredients and additives used in drugs, animal feed and cosmetics. Evonik, which is a candidate to join Germany’s benchmark DAX index, postponed IPO plans from last year as did Siemens AG (SIE)’s Osram lighting business and Rheinmetall AG (RHM)’s car- parts unit after the European debt crisis led to volatility on the markets.

“Together with Evonik and CVC we want to push on with preparation for the IPO in light of the economic perspective and the strong interest in Evonik from the capital market,” RAG Chairman Wilhelm Bonse-Geuking said in the release. “We have to keep an eye on the not unimportant and growing risks.”

When RAG and CVC first proposed the IPO last year, they planned to raise 4 billion euros ($5.1 billion) to 7 billion euros in a first tranche, valuing Evonik at as much as 20 billion euros, people familiar with the matter said at the time. That would make Evonik the biggest IPO in more than a decade after Deutsche Post AG (DPW) raised 5.84 billion euros in November 2000.

Standard & Poor’s upgraded Evonik one level to BBB+ on May 9 as the company cuts debt. That’s three levels above non- investment grade.

Rheinmetall, a German defense company, slumped 13 percent last week on concern about the planned share sale of its car- parts unit, which has been rescheduled for the first half. The DAX index has fallen 7 percent this month as political deadlock in Greece boosts the likelihood of the country’s exit from the euro.

Evonik posted sales of 14.5 billion euros and earnings before interest, tax, depreciation and amortization of 2.77 billion euros last year.

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at

To contact the editor responsible for this story: Benedikt Kammel at

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