BASF to Acquire Solvay Polyamides Business in EUR1.6 Billion Deal
19 Septembre 2017 - 10:57AM
Dow Jones News
By Marc Bisbal Arias
BASF SE (BAS.XE) said Tuesday it would buy Solvay SA's (SOLB.BT)
polyamides business for 1.6 billion euros ($1.92 billion), in a
move to bolster its engineering plastics portfolio and improve
access to growth markets.
The deal covers Solvay's upstream and downstream polyamides
business in Europe, North America and Asia, as well as its
downstream engineering plastics operations in Latin America. Solvay
will retain its upstream intermediates and downstream textile
polyamide business in Latin America.
BASF said the businesses it is buying had net sales of EUR1.32
billion in 2016 and earnings before interest, taxes, depreciation
and amortization of around EUR200 million.
Belgium-based Solvay expects net cash proceeds from the deal to
be around EUR1.1 billion, and restated recent results and guidance
to reflect the sale.
The companies aim to close the transaction in the third quarter
of 2018.
The deal will give BASF critical mass in its downstream
polyamides business, Peter Spengler at DZ Bank said. BASF plans to
integrate the acquisition into its performance materials and
monomers divisions.
Solvay Chief Executive Jean-Pierre Clamadieu said the planned
divestment was key to its transformation into a multispecialty
chemicals, a strategy that involves rejigging its portfolio to
focus on advanced technologies.
Solvay said the divestment will reduce 2017 Ebitda growth since
the polyamide business performed strongly this year. The strong
euro will also hit profit reported in euros and Solvay estimates
underlying Ebitda growth of 6%-8%, based on current exchange
rates.
The Belgian company will reclassify the divestment as
discontinued operations at the end of September. As a result, the
retained Latin American business will incur an impairment of about
EUR100 million, which should be more than offset by transactional
gains, it said.
Solvay also restated sales for 2015, 2016 and the first half of
2017, with the latter figure reduced to EUR5.18 billion from
EUR5.99 billion. Ebitda and operating profit were also adjusted,
but net income didn't change, according to Solvay.
Write to Marc Bisbal Arias at marc.bisbalarias@dowjones.com
(END) Dow Jones Newswires
September 19, 2017 04:42 ET (08:42 GMT)
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