Cinven Ltd is in exclusive talks to buy CeramTec, the industrial ceramics unit of U.S. chemicals maker Rockwood Holdings Inc ( id="symbol_ROC.N_0">ROC.N), for close to 1.5 billion euros ($2 billion), three people familiar the matter said on Friday.
Cinven beat rival private equity firm BC Partners Ltd in the final bidding for CeramTec, the people said. A deal could be announced in the next few days, they added, but cautioned the talks could still fall apart.
BC Partners had offered just over 1.4 billion euros, one of the people said.
The people spoke on condition of anonymity because the talks are confidential. Cinven and BC Partners declined to comment, while Rockwood could not immediately be reached for comment.
Rockwood shares jumped on the news and ended trading on Friday up 2 percent at $66.56.
Germany-based CeramTec, founded in 1903, makes ceramics used in thousands of products from water treatment filters to electronic components in factory robots. It is one of three business units that Rockwood has put on the block.
Earlier this year, Rockwood CEO Seifi Ghasemi described the Princeton, New Jersey-based company's lithium and surface treatment businesses as core and said it would explore a sale of CeramTec in addition to its performance additives business and titanium dioxide business.
After struggling to fetch a good price for the titanium dioxide business, Rockwood bundled it with its performance additive operations in another auction that has attracted several private equity firms including Blackstone Group LP ( id="symbol_BX.N_1">BX.N) and Apollo Global Management LP ( id="symbol_APO.N_2">APO.N), people familiar with the matter said last month.
Rockwood's focus on lithium has been driven by the advent of lithium batteries used in cars to cut carbon emissions. The rising popularity of smartphones and tablets, which need longer-running batteries, is also fuelling lithium demand.
(Reporting by Greg Roumeliotis in New York and Philipp Halstrick in Frankfurt; Editing by Andre Grenon, Bernard Orr)