(Yicai) Aug. 1 -- Global New Material International Holdings, a Chinese synthetic mica producer, has completed its EUR665 million (USD759.7 million) acquisition of Merck Group's Surface Solutions business, marking the largest cross-border deal in China’s pearlescent materials sector.

The transaction represents a significant step in GNMI’s global expansion, as it evolves from a pigment manufacturer into a full-spectrum surface solutions provider, Chairman Ertian Su said in a press release today. The acquired unit will operate under a new brand name, Susonity.

Pearlescent pigments, used to produce shimmering effects in cosmetics, paints, plastics, and textiles, are in growing demand. After reaching USD1.2 billion last year, the global pearlescent pigments market is projected to expand to USD1.6 billion by 2030, driven by increased use across automotive, cosmetic, and industrial sectors and a broader shift away from natural mica due to environmental concerns, according to a recent report by Allied Market Research.

The acquisition gives GNMI three new production hubs -- in Gernsheim, Germany; Onahama, Japan; and Savannah, United States -- complementing its existing operations in China and South Korea.

Surface Solutions generated EUR411 million in revenue in 2023 and employs about 1,100 people worldwide, including over 600 in Germany. GNMI, headquartered in China’s Guangxi Zhuang Autonomous Region, has committed to retaining staff in Germany and continuing operations in Gernsheim through 2032, addressing local concerns about foreign takeovers of German industrial assets.

For Merck, the sale aligns with its strategy to focus on core electronics and semiconductor operations. “With the closure of this transaction, we are further sharpening our portfolio focus on technology-driven business,” said Chief Executive Belén Garijo.

Despite the added asset, GNMI shares [HKG: 6616] closed 1 percent lower at HKD5.10 (US 70 cents) in Hong Kong today.

Editor: Emmi Laine