By 
Lanxess AG said Tuesday that it would join with private-equity firm Advent International Corp. to buy Royal DSM NV’s
DSM,
+2.64%
engineering-materials business for around 3.7 billion euros ($3.99 billion) and create a new venture for high-performance plastics.
The announcement came after the Netherlands-based DSM said earlier Tuesday that it would merge with Swiss fragrance company Firmenich SA to create a company with a EUR25 billion market cap.
The DSM engineering-materials business, which would become part of the joint venture, represents sales of around EUR1.5 billion and operating-profit margin of around 20%, Lanxess
LXS,
+2.09%
said.
The German chemical company said it would also transfer its own high-performance materials business into the joint venture, and receive EUR1.1 billion initially and a stake of up to 40% in the new business.
Lanxess said it would use the proceeds to reduce debt and launch a EUR300 million share-buyback program.
Advent will hold at least 60% in the joint venture, Lanxess said.
The deal is expected to close in the first half of 2023, subject to approval by authorities, Lanxess said.
Write to Ed Frankl at edward.frankl@dowjones.com
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