By Matthias Inverardi
DUESSELDORF, Germany (Reuters) - Germany's Evonik (DE:EVKn) is close to buying J.M. Huber Corp.'s [CPKEL.UL] silica unit for $630 million (500.55 million pound) to widen its speciality chemicals business, a source told Reuters.
Evonik's supervisory board will meet on Friday to decide on the deal, which will complement Evonik's own silica products. These are mainly used to improve the wet grip of tyres.
The planned deal would help Evonik sell versatile silica additives to a wider customer base, including makers of toothpaste, animal feed and paints, and will give it better access to Asian markets, especially India.
An Evonik spokesman confirmed the company's interest in the J.M. Huber business and that the board was due to meet, adding there have been talks.
Officials at J.M. Huber were not immediately available to comment.
Evonik, controlled by a public-sector trust, has been seeking to cut its dependence on volatile animal feed ingredients and in May agreed to buy an additives businesses from of U.S. group Air Products and Chemicals (N:APD) for $3.8 billion.
That followed a two-year-long search for larger takeover targets, amid increasing calls from shareholders to return some of the cash that Evonik had held back for potential deals.
The Huber business, which Evonik plans to finance mainly from existing liquidity reserves, has about $60 million in earnings before interest, taxes, depreciation and amortisation (EBITDA), the source said.
Tax and cost efficiency benefits from folding the Huber unit into Evonik will add about $20 million in core earnings per year, the source added.
Evonik's competitors in silica include Belgium's Solvay (BR:SOLB), PPG Industries (N:PPG) of the U.S. and Taiwan's OSC Group.