Evonik creates new entity to house huge real estate holdings

The Essen-based mining and chemicals conglomerate Evonik has formally merged its huge real estate holdings into one company, the 130,000-unit Vivawest, and has transferred most of its shares into its employees pension fund as part of a long-mooted plan for its eventual hiving-off from the parent company.

Evonik now plans to divest its remaining stake of 11% to long-term investors. The old Vivawest and THS were combined to create a “new stable ownership structure,” said Evonik in a statement. Other shareholders include the RAG Foundation, majority-owner of Evonik, with 30%, the trade union IG BCE with 27%, and the Evonik pension fund with 25% of shares. Aside from the remaining 11%, another 7% are held directly by RAG. The Vivawest portfolio, with 130,000 apartments across the populous state of North Rhine-Westphalia, would still be ranked as the third-largest residential holding in the country.

As part of the new structure, Helmut Linssen, federal treasurer of the CDU conservative party, has been appointed chairman of the supervisory board and Ulrich Freese, deputy chairman of the German Mining, Chemical and Energy Industrial Union (IG BCE), becomes deputy chairman. “As a shareholder, our foundation is earning profits we would not see from other investments with a comparable level of security,” said RAG Foundation Chairman Werner Müller. The consolidation also strengthens the viability of one of the largest real estate firms in the Ruhr region.

There have been a number of false alarms in the past when it looked as if Evonik was readying the housing portfolio for a €1bn-plus public stock market flotation, but there has been less talk of this over the past couple of years, as the entire conglomerate regroups.

Nonetheless, Evonik Chairman Klaus Engel said he was pleased to find a viable solution for real estate in cooperation with all involved parties. "This means long-term planning security for Vivawest, while ensuring the next development step for Evonik in its effort to become a pure specialty chemicals company.”