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Updated Tuesday, July 12, 2011 9:03 pm TWN, AFP

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Swiss biochemicals group Lonza to buy Arch Chemicals for US$1.4 bil.

ZURICH--Swiss biochemicals group Lonza said Monday it is offering to pay US$1.4 billion to acquire U.S. group Arch Chemicals, a move which it said would strengthen its position in the market of microbe control.

Lonza is offering US$47.20 for each Arch Chemicals share, a premium of 36.7 percent over the U.S. firm's average closing price over the last 30 trading days.

“This transaction represents an excellent strategic and cultural fit. Lonza and Arch Chemicals offer highly complementary products and technologies and together will be the global leader in controlling unwanted microbes,” said Stefan Borgas, chief executive of Lonza.

“The business will enjoy a strong platform for accelerated future growth for the benefit of all our stakeholders,” he added.

While the merger will require integration costs of US$85 million over the next two years, Lonza is aiming to save US$50 million a year by the second year of its merger with Arch Chemicals.

It also targets sales growth of US$40 million by the third year.

Connecticut-based Arch Chemicals employs 3,000 people and posts annual sales of over US$1 billion.

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