Brenntag acquires Chinese Wellstar Group

By Natasha Spencer

- Last updated on GMT

Brenntag acquires Chinese Wellstar Group

Related tags: Hong kong, China

German chemical distributor, Brenntag, enhances its Asia Pacific presence through acquiring Hong Kong Wellstar Enterprises and its subsidiaries.

The acquisition deal

On 27th June 2017, Brenntag announced it had signed an agreement with speciality chemical distributor, Wellstar Enterprises and its three Chinese subsidiaries, collectively known as Wellstar Group.

The agreement will see Brenntag obtain Wellstar Group in two steps to gain 100% of its shares. After gaining an initial 51% majority stake in 2017, the remaining 49% will be acquired by 2021.

Between 2017 and 2021, Brenntag and Wellstar Group will operate a joint venture. Wellstar Group will use its chemical expertise and strategic position to distribute speciality pigments, resins and additives largely across China.

APAC portfolio

“The acquisition perfectly fits into Brenntag’s growth strategy in the Asia-Pacific region [and] the investment thus complements Brenntag China’s objective to build up a speciality chemical division for various industry segments, i.e. coatings and personal care,”​ said Henri Nejade, member of the management board of Brenntag Group and CEO Brenntag Asia Pacific.

Along with its headquarters in Hong Kong, Wellstar Group also has three mainland China subsidiaries located in Shanghai, Shenzhen and Guangzhou to maximise distribution capabilities.

Selling and distributing pigments, resins and kaolin, the new partnership will help to develop Brenntag’s presence in the Chinese and APAC cosmetics industries.

Building Chinese inroads

“Brenntag considers the joint venture as well-positioned to grow on the back of favourable market trends,”​ strengthened Anthony Gerace, managing director mergers and acquisitions at Brenntag Group.

“Moreover, the acquisition gives us the opportunity to strengthen our relationship with a strategic key supplier, and we see synergy potential with our existing Brenntag China’s customer base,”​ Gerace added.

Brenntag generated total sales of around €27.6 mn in 2016. The first element of the acquisition will take place over summer 2017, where the two companies will then bridge the gap between European and APAC chemical distribution by using leading cosmetics hub, China, as a core base.  




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