Henkel Signs Agreement for Sale of Cognis

Henkel KGaA has agreed to sell its chemical division Cognis to a consortium of financial investors comprising of Schroder Ventures and Goldman Sachs Capital Partners. The transaction is based on an enterprise value of 2.6 billion euro.

Henkel has succeeded in finding purchasers who are able to support the continued successful development of Cognis and thereby offer the Cognis employees a promising perspective.

The definite purchase agreement was signed by the parties on September 12, 2001. Closing is planned for end of November 2001. Due to the current uncertain conditions in the financial markets arising from the tragic events in the U.S., Henkel has granted to the investors the absolute right to withdraw from the contract within two months. The agreement is subject to customary closing conditions, including relevant regulatory approvals. The proceeds from the sale of Cognis will increase Henkel’s debt capacity substantially and will be used for the further development of the core businesses.

Cognis, the former chemical products business of Henkel and a leading worldwide supplier of specialty chemicals, was carved out from Henkel in 1999. The three divisions of the Cognis Group (oleochemicals, care chemicals and organic specialties) serve international manufacturers of detergents, cleaners and cosmetics, as well as other industrial customers. With 9,100 employees in 50 countries, Cognis generated sales of 3.2 billion euro in 2000, accounting for 23% of total Henkel Group sales. In the first half-year of 2001, Cognis achieved an increase in sales of 4% to 1.5 billion euro. Operating profit rose by 3.6% to 116 million euro.

Schroder Ventures, headquartered in London, is a leading European private equity specialist with a strong network in the UK, Germany, France and Italy. Schroder Ventures has invested over US$ 2.9 billion in more than 400 companies and manages a portfolio of around 140 companies. One of the biggest recent acquisitions has been VEBA Electronics in 2000.

Goldman Sachs Capital Partners is the private equity arm of Goldman Sachs, one of the oldest and largest investment banking firms in the world. Headquartered in New York, it has 44 offices in 20 countries. Since 1986, Goldman Sachs Capital Partners has invested over US$ 9.5 billion in more than 470 companies in various industry segments and has specific expertise with respect to investments in German companies, including the recent acquisition of Messer Griesheim from Aventis jointly with Allianz Capital Partners.