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Evonik Industries

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Evonik Industries AG
Company typeAktiengesellschaft
FWB: EVKA
IndustrySpeciality chemicals
Founded2007
HeadquartersEssen, Germany
Key people
Klaus Engel (Chairman), Wilhelm Bonse-Geuking (Chairman of the supervisory board)
ProductsChemicals
Number of employees
34,000 (2010)[1]
Websitewww.evonik.com

Evonik Industries is an industrial corporation in Germany owned by RAG Foundation. It was created on 12 September 2007 as a result of restructuring of the mining and technology group RAG. Evonik Industries united the business areas of chemicals, energy and real estate of RAG, while mining operations continue to be carried out by RAG. Evonik Industries employs about 34,000 employees and carries out activities in more than 100 countries. Its operations are separated into 14 business units. Evonik is the main sponsor of Borussia Dortmund.

Historical significance

In 2006 RAG acquired Degussa AG, which was later renamed Evonik-Degussa GmbH. Degussa was the main manufacturer and distributor of the chemical Zyklon B. Zyklon B was developed by Degesch in 1922 as a pest control agent against insect and rodent pests. Before, during and after World War II, it was used for pest control on civil and military premises including Nazi concentration camps.

More than 95% of the Zyklon B delivered to the Auschwitz death and concentration camps (Auschwitz I, Auschwitz II (Birkenau) and Auschwitz III (Monowitz)) were also used for insect pest control (delousing). The remaining 5% were sufficient, however, to commit a substantial share of the industrial-scale mass killings of the holocaust in homicidal gas chambers.[2][3]

Creation of the company

Historically Evonik Industries' businesses were part of RAG activities. The idea of splitting the company was put forward in 2005. The background of this idea was that RAG's core business of coal mining is carried out under government contract in Germany, while businesses transferred to Evonik compete on international markets. This structure did not permit the payment of dividends to the shareholders, which limited shareholders' readiness to inject equity into the RAG, which restricted the company's ability to access fresh capital. As the first step, RAG’s shareholders sold their shares to RAG foundation (RAG-Stiftung) to split RAG. The Foundation was established on 10 July 2007 and Evonik Industries was created on 12 September 2007.

The original plan foresaw IPO of Evonik Industries in the first half of 2008. However, this plan was postponed until mid-2010 at the earliest and the RAG Foundation started to look for strategic investors, while still holding on to the plans for midterm IPO.[4][5] In June 2008, the private equity firm CVC Capital Partners bought a stake of 25.01% in the company.[6] Among many other private equity investors who bid for the stake (amongst them Blackstone Group and 3i), Russian Gazprom was reported to have considered buying a stake in Evonik Industries.[7]

Ownership Structure

Finally, since 2008 the ownership structure of the Evonik Industries AG is composed as follows[8]:

  • 74,99% is held by the RAG Foundation
  • 25,01% is held by Gabriel Acquisitions GmbH (a company owned by funds advised by CVC Capital Partners)

Operations

After concentrating operations to the holding´s core the former business areas Energy and Real Estate are now mere financial investments, leaving the chemical business area of Evonik as the only one operated by Evonik Industries[6].

Chemicals Business Area

Degussa factory in Hopewell, Virginia
Degussa gold, 5 g

The Chemicals Business Area of Evonik emerged from Evonik Degussa GmbH (formerly Degussa GmbH — an acronym of Deutsche Gold- und Silber-Scheide-Anstalt (German Gold and Silver Metals Separating Works)) based in Essen, Germany. It employs about 34,000[1] people and is one of the the world's largest producers of specialty chemicals. It includes six business units: Advanced Intermediates, Consumer Specialities, Coatings & Additives, Inorganic Materials, Health & Nutrition and Performance Polymers.[9] Also the purification of precious metals was one of the central parts of Degussa. Degussa was acquired by RAG in 2006. Latest acquisition: Tippecanoe Labs plant site at Lafayette Indiana from Eli Lilly 1 January 2010

Energy Business Area

Evonik Industries operated Bergkamen Power Station

The energy business portion of Evonik is operated through Evonik Steag GmbH (formerly STEAG), which is the fifth largest power company in Germany, based in Essen. The company operates eleven hard coal-fired power plants, of which nine are located in Germany, and one in Turkey, Colombia and Philippines, and two industrial power plants. It operates also in the field of transport, processing and distribution of hard coal, coke and byproducts from coal processing, as also in the field of gas supply, transport and trading. In December 2010 Evonik Industries signed an agreement to sell 51% of shares in its energy business to a consortium of municipal utilities in Germany´s Rhine-Ruhr region. The agreement was finalized on March 2nd, 2011. Evonik will be selling its remaining stake to this majority partner within five years[10].

Real Estate Business Area

Evonik Immobilien GmbH manages around 60,000 company-owned residential units in Germany. In addition, it has a 50% stake in the TreuHandStelle GmbH, which manages more than 70,000 residential units. Evonik Immobilien GmbH is to be amalgamated with TreuHandStelle GmbH and placed on a more independant basis in the medium term[6].

References

  1. ^ a b "Facts & figures 2010". Evonik. Retrieved 25 May 2011.
  2. ^ http://www.holocaust-history.org/auschwitz/pressac/technique-and-operation/pressac0015.shtml
  3. ^ Degussa's historical responsibility, S vormals Roessler, GAGR GmbH, C KG, retrieved 8/31/09
  4. ^ "RAG may sell more Evonik shares to individual investor prior to IPO - Evonik CEO". Forbes. 12 June 2008. Retrieved 11 July 2008.
  5. ^ Eva Kühnen (1 April 2008). "Evonik says owners drop IPO plans for now". Reuters. Retrieved 11 July 2008.
  6. ^ a b c Matthias Inverardi; Philipp Halstrick (3 June 2008). "CVC to pay 2.4 bln eur for Evonik stake-sources". Reuters. Retrieved 11 July 2008.{{cite news}}: CS1 maint: multiple names: authors list (link) Cite error: The named reference "reuters2" was defined multiple times with different content (see the help page).
  7. ^ Peter Dinkloh (11 June 2008). "Russia's Gazprom says gas prices to keep rising". Reuters. Retrieved 11 July 2008.
  8. ^ "Ownership structure of Evonik Industries AG". Evonik. Retrieved 26 May 2011.
  9. ^ "Operational divisions". Evonik. Retrieved 26 May 2011.
  10. ^ "Rhein-Ruhr consortium of municipal utilities becomes new majority owner of Evonik Steag GmbH". Evonik. Retrieved 26 May 2011.

Bibliography

  • Peter Hayes, From Cooperation to Complicity: Degussa in the Third Reich (Cambridge, Cambridge University Press, 2004).

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