Lanxess shares plunge after Advent calls off Envalior share purchase

March 6 (Reuters) - Shares in Lanxess LXSG.DE tumbled on Friday to a 17-year low after the German speciality chemicals maker said that an investment vehicle backed by European buyout group Advent no longer intends to take full ownership of a jointly held plastics business this year.

Lanxess late on Thursday said that the Advent-backed investment vehicle decided against the purchase of its remaining stake of just under 41% in the Envalior joint venture, a deal that would have entitled Lanxess to around 1.2 billion euros ($1.39 billion) in proceeds.

Shares in Lanxess were down 14.36% as of 1057 GMT, their lowest since March 2009.

The German chemical sector, the country's third-largest, has been struggling for years with an economic slowdown, high energy costs and supply chain issues.

In its statement on Thursday, Lanxess said that Advent had invoked a contractual clause that allowed it to withdraw from the purchase if certain financing conditions were not met.

Additional tender and purchase periods for Lanxess shares in the joint venture will now apply in 2027 and 2028, the chemicals maker said.

The decision marks a significant setback for Lanxess, which had been working to finalize an exit from the engineering materials joint venture.

($1 = 0.8639 euros)