(Bloomberg) -- Global New Material International Holdings Ltd., a Chinese colorant producer, is in talks on a potential acquisition of Merck KGaA’s pigments arm, people with knowledge of the matter said.
Hong Kong-listed Global New Material, which sells pigments under the Chesir brand name, has made a binding bid for the Merck unit, according to the people. It’s been discussing financing options for the potential purchase, they said, asking not to be identified because the information is private.
A deal could value the pigments business at nearly €1 billion ($1.1 billion), the people said.
Global New Material makes pearlescent pigments from materials including synthetic mica. Its products are used to created shiny colors for industrial coatings, plastics, cosmetics and automotive paint. Shares of Global New Material have gained 11% this year, giving the company a market value of $668 million.
The Chinese company’s discussions with Darmstadt, Germany-based Merck are ongoing, and there is no certainty the parties will reach an agreement, the people said. Other suitors have also expressed interest in the business, they said.
A spokesperson for Merck declined to comment. Calls to the offices of Global New Material offices weren’t answered and it didn’t immediately respond to emailed queries.
Global New Material in January agreed to acquire a roughly 42% stake in listed South Korean pigment producer CQV Co. for 85.9 billion won ($66 million). The company said in March it would continue seeking international acquisitions to boost its competitiveness.
--With assistance from Tim Loh.
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