KKR, which only last month bought the UK insurance broker Willis Corroon for pounds 951m, said it was spending DM3bn - its largest investment in Europe - to back a management buyout of Herberts, one of Europe's largest automotive paints makers.
The business, which last year had sales of DM 2.7bn, was put up for sale earlier this year as part of Hoechst's plan to dispose of its chemical operations to become a pharmaceuticals and life sciences group by 2000.
News of the disposal came as Hoechst indicated that consolidation in the pharmaceutical industry might force it to seek a partner for drug operations.
KKR, the American leveraged buyout specialist which shot to fame in the 1980s when its takeover of RJR Nabisco was immortalised in the book Barbarians At The Gate, said that the Herberts and Willis Corroon deals were part of a renewed drive into Europe.
Clifton Robbins, KKR general partner, said Europe was becoming "a particularly fertile ground" for leveraged buyout specialists. He said that as large European corporations refocus on core businesses, there would be "major opportunities" in the near term.
Mr Robbins said that the company chose to buy Herberts for the "quality of its business and the quality of its management".
He said KKR was planning to retain a stake in Herberts for a considerable time and noted that the average length of KKR's investments was "between seven and 10 years". The existing Herberts management, who yesterday bought an undisclosed stake in the business, will continue to run the operation, he added.
Hoechst said yesterday that it was considering a separate float of its plastic and basic chemicals divisions.