Germany’s Brenntag in takeover talks with U.S. rival Univar

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Brenntag SE said on Friday it held preliminary discussions with U.S. rival Univar Solutions Inc regarding a potential acquisition, as the German chemicals distributor seeks to expand its footprint in the United States.

The move comes after Brenntag’s top boss this month said the company is eyeing the North American market with more interest and plans to double annual spending in mergers and acquisitions.

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Chief Executive Christian Kohlpaintner had said then that the North American market was “more robust than a lot of people think” and could have a competitive advantage over the energy crisis-stricken European market.

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In a statement on Friday, Brenntag said the discussions were ongoing and that it was not foreseeable whether there will be any kind of transaction.

Brenntag said earlier it plans to double its annual spending for mergers and acquisitions to 400 million to 500 million euros ($400 million-$500 million) as part of a strategic growth plan.

Univar confirmed a preliminary indication of interest from Brenntag regarding the transaction in a statement late on Friday, without giving additional details.

Surging gas prices have severely hit German chemical producers this year. A plunge in Russian gas exports after Russia’s invasion of Ukraine has sparked a continent-wide energy crisis, leading to soaring energy prices. (Reporting by Akriti Sharma in Bengaluru; Additional reporting by Jose Joseph and Rahat Sandhu; Editing by Lisa Shumaker and William Mallard)