Lonza shortlists bidders for $4 billion specialty ingredients unit

Lonza Group AG has narrowed the list of bidders for its specialty ingredients unit, one of the European chemical industry’s most hotly-contested sale processes, people with knowledge of the matter said.

The Swiss company invited suitors including Carlyle Group Inc. and Bain Capital’s consortium with Cinven to make second-round offers, according to the people. Lone Star Funds and Partners Group Holding AG have also progressed to the next round of bidding for the Lonza business, the people said, asking not to be identified because the information is private.

Blackstone Group Inc., CVC Capital Partners and Clayton Dubilier & Rice are no longer in the running, the people said. The unit, which also attracted interest from Advent International and German chemicals group Lanxess AG, could fetch around 3.5 billion Swiss francs ($3.9 billion), Bloomberg News has reported.

The Lonza business manufactures chemicals for use in everything from paints to crop protection. Its microbial control solutions are also used in professional cleaning products and sanitizers, which have attracted strong demand amid the coronavirus pandemic.

Shares of Lonza have risen 54% in Zurich trading this year, giving the company a market value of about 40.6 billion francs. No final decisions have been made, and there’s no certainty the bidders will proceed with binding offers, the people said.

Representatives for Bain, Blackstone, Carlyle, CD&R, Cinven, CVC, Lone Star, Lonza and Partners declined to comment.