Merck, a leading science and technology firm, has finalized an agreement to sell its global Surface Solutions business unit to Global New Material International Holdings Ltd. (HKSE: 6616) for €665 million in cash. Merck plans to reinvest the proceeds from this sale to further bolster its core strategic businesses.

“The sale of the Surface Solutions business unit will allow us to concentrate more on high-tech applications in Electronics, particularly in advancing next-generation chip development as a comprehensive solutions provider for our semiconductor clients,” stated Belén Garijo, Chair of the Executive Board and CEO of Merck. “GNMI and our Surface Solutions business will merge their expertise, creating an even more formidable team dedicated to excellence in the pigments industry.”

“Integrating Surface Solutions with GNMI will boost the business's competitiveness, providing better opportunities for both employees and customers. Simultaneously, this transaction enables us to concentrate more closely on the semiconductor and display industries within our Electronics division,” added Kai Beckmann, Member of the Executive Board of Merck and CEO of Electronics.

“Both Merck's Surface Solutions unit and GNMI embrace a growth philosophy centered on the customer. Our activities complement each other well in terms of products, expertise, and regional presence. By combining forces, we will be excellently positioned to drive growth in a dynamic market segment. Ertian Su, Chairman & Chief Executive Officer of GNMI, stated, "The combined businesses will enhance customer proximity with a presence in every region and a wider product portfolio known for its quality and reliability." “We are impressed by the dedication, experience, and expertise of Surface Solutions’ employees and look forward to welcoming them to the company. This combination will provide attractive long-term career prospects, including job guarantees for employees in Germany and a site guarantee for Gernsheim until 2032. This clearly demonstrates our appreciation for the business and its employees.”

Surface Solutions offers pigment products for use in coatings, industrial applications, and cosmetics. In 2023, the business unit achieved sales of €411 million. As part of the transaction, around 1,200 employees, with approximately 700 based in Germany, will be transferred to GNMI.

GNMI, operating under the brand name Chesir, is one of the leading producers of pearlescent pigments. Established in 2011, the company has facilities in China and Korea, employing around 800 people, and is listed on the Hong Kong stock exchange. GNMI has extensive expertise in effect pigments and the fast-growing, competitive field of mica-based products. The company is known for its deep understanding of the Asian market, particularly China, especially in pearlescent pigments, industrial coatings, and plastics. Additionally, GNMI excels in rapid commercialization and optimized profitability through economies of scale.

To facilitate the completion of the sale, an integration team consisting of representatives from both companies will be established to identify the best ways to combine their strengths. GNMI plans for the Surface Solutions business unit to have three regional headquarters located in Germany, the United States, and Asia, while retaining its current production facilities in Gernsheim, Germany; Onahama, Japan; and Savannah, Georgia, USA. Merck will remain the owner of the Gernsheim property, leasing it long-term to GNMI with a clear separation plan for the area utilized by Surface Solutions. The GreenTech Park Fluxum in Gernsheim will not be affected by the sale.

The transaction is anticipated to be finalized in 2025, pending regulatory approvals and the fulfillment of other customary closing conditions. The sale of Surface Solutions does not currently include the French Surface Solutions business. GNMI has made a binding offer to acquire the relevant shares and assets once Merck has completed the necessary consultations with the relevant works council representatives.