Hoechst AG, Europe’s fourth-biggest drugmaker, agreed Wednesday to sell its Herberts paint unit to Kohlberg Kravis Roberts & Co. for $1.7 billion, furthering its transformation from a bulk-chemicals company into a maker of drugs, foods and other higher-profit products.
Following rivals such as Switzerland’s Novartis AG and France’s Rhone-Poulenc SA, Hoechst is shedding low-margin chemicals units that have been hit by overcapacity and the Asian recession. New York-based KKR, the biggest U.S. buyout firm, said the Herberts division could grow better “with an entrepreneurial focus.”
Hoechst, maker of the Allegra allergy treatment, said in April it would sell its Trevira polyester unit to Koch Industries Inc. and Grupo Xtra of Mexico for $2.7 billion. The unit made up 11 percent of Hoechst’s 1997 sales.
KKR said it plans to expand Herberts further in international markets.
