Solvay to Sell Polyamides Business to BASF for EUR1.6Bln
September 19 2017 - 2:16AM
Dow Jones News
By Marc Bisbal Arias
Solvay SA (SOLB.BT) said Tuesday that it agreed to sell its
polyamides business to BASF SE (BAS.XE) for 1.6 billion euros
($1.92 billion) and restated its recent results and guidance to
reflect the sale.
A final agreement is expected in the coming months, Solvay said.
The companies aim to close the deal in the third quarter of 2018,
after regulatory approval and formal consent of a joint venture
partner has been received.
Expected net cash proceeds are estimated at around EUR1.1
billion, Solvay said, adding that taking into account the
liabilities of about EUR200 million to be transferred, the net
financial position will improve by about EUR1.3 billion.
Solvay said the divestment will reduce 2017 growth in earnings
before interest, taxes, depreciation and amortization since the
polyamide business performed strongly this year. The strong euro
will also reduce profit reported in euros. Based on current
exchange rates, Solvay estimates 6% to 8% underlying EBITDA growth
for 2017.
The deal is a "crucial step" in Solvay's transformation towards
a mult-specialty chemicals company, it said.
"Solvay's planned divestment of Polyamides marks a tipping point
in the profound transformation journey we began four years ago,"
said Chief Executive Jean-Pierre Clamadieu.
The transaction covers Solvay's upstream and downstream
polyamides business in Europe, North America and Asia, as well as
the downstream engineering plastics business in Latin America.
Solvay will retain its upstream intermediates and downstream
textile polyamide business in Latin America.
Solvay's polyamides business has become more profitable over the
past years, it said.
The business being divested will be reclassified to 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 compensated by the gain on the
transaction, Solvay said.
Write to Marc Bisbal Arias at marc.bisbalarias@dowjones.com
(END) Dow Jones Newswires
September 19, 2017 02:01 ET (06:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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