Royal DSM to Sell DSM Elastomers to LANXESS

Royal DSM N.V., the global Life Sciences and Materials Sciences company headquartered in the Netherlands, today announces that it has reached an agreement regarding the sale of the remaining part of DSM Elastomers (DSM Elastomers) to LANXESS for EUR 310 million on a cash and debt-free basis.

The intended sale is expected to close in the first months of 2011, subject to regulatory and other customary approvals and notifications.

The intended sale of DSM Elastomers, producer of EP(D)M rubber under the brand name Keltan®, is a result of DSM's ambition to focus on Life Sciences and Materials Sciences. DSM Elastomers no longer fits with this focus. Earlier this year, DSM sold the business unit Thermoplastic Elastomers (Sarlink®), formerly part of this business group, to Teknor Apex Company.

The price for the DSM Elastomers business represents an EBITDA multiple of roughly 6 based on the expected EBITDA of 2010. DSM expects to report a book profit of more than EUR 100 million as a result of the transaction upon closing. Approximately 420 employees will transfer to the new owner upon closing.

This announcement represents the final stage of the transformation of DSM that began with the divestment program DSM announced in September 2007 as part of its Accelerated Vision 2010 program. Previously, DSM finalized the divestments of DSM Agro, DSM Melamine, Citric Acid, Stamicarbon as well as its energy interests. Total divestment proceeds - including the proceeds from the intended sale of DSM Elastomers - are expected to be about EUR 1.2 billion.

Feike Sijbesma, CEO/Chairman of the DSM Managing Board, said: "The sale of DSM Elastomers completes our Vision 2010 strategy to become a focused Life Sciences and Materials Sciences company. This transformation has been achieved within our desired timeframe and at favorable conditions for our shareholders and employees. DSM has now entered a new era focused on driving growth and returns with enhanced earnings quality and confidence in meeting our medium-term targets."

"We look forward to welcoming DSM's professional EPDM team as well as its impressive assets to our core synthetic rubber activities," said Axel C. Heitmann, LANXESS CEO. "The transaction will also be an important step towards our goal of achieving roughly EUR 1.4 billion EBITDA pre exceptionals in 2015."

Nico Gerardu, Member of the DSM Managing Board and responsible for the Base Chemicals and Materials cluster, commented: "Despite very challenging market conditions since we announced our intention to divest DSM Elastomers, we succeeded in announcing this sale within the timeframe of Vision 2010, as originally planned. I am very pleased that LANXESS has agreed to become the new owner for DSM Elastomers as there is a great strategic fit. I would like to thank all DSM Elastomers employees for their ongoing support and substantial contribution to DSM."

DSM Elastomers produces a range of synthetic rubber polymers (ethylene propylene diene monomer or EP(D)M, under the brand name Keltan®. EP(D)M is used in many products, such as cars and other transportation vehicles, white goods, various industrial products and construction materials. It is also used as a motor- oil additive and waterproof covering for roofs. Production plants for Keltan are based in Sittard-Geleen (Netherlands) and Triunfo (Brazil). The business is expected to achieve sales of about EUR 380 million in 2010.


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