Durability + Design
Follow us on Twitter Follow us on LinkedIn Like us on Facebook Follow us on Instagram Visit the TPC Store
Search the site

 

D+D News

Main News Page


AkzoNobel to Sell Specialty Chemical Business

Wednesday, March 28, 2018

More items for Good Technical Practice

Comment | More

Nearly a year after announcing it would spin off its Specialty Chemicals business, global coatings firm AkzoNobel (Amsterdam) revealed Tuesday (March 27) its 10.1 billion euro ($12.5 billion) sale to The Carlyle Group (Washington, D.C.) and Singapore’s sovereign wealth fund GIC.

The transaction, expected to be completed by the end of this year, results in the creation of what AkzoNobel calls two focused businesses—Paints and Coatings, and Specialty Chemicals, now owned by Carlyle and GIC.

Specialty Chemicals Spinoff

In the original announcement in April 2017, the global coatings manufacturer detailed that the plan was to sell or list the chemicals business (which accounted for about a third of sales and profits) within the next year. At the time, analysts valued the division at approximately 8 billion euros ($9.9 billion), based on the company’s 2016 operating profit of 629 million euros.

AkzoNobel

As part of a move announced in April 2017, global coatings manufacturer AkzoNobel (Amsterdam) announced Tuesday (March 27) the 10.1 billion euros ($12.5 billion) sale of its Specialty Chemicals business to The Carlyle Group and Singapore’s sovereign wealth fund GIC.

The separation of the Specialty Chemicals business has been discussed for some time, but the formal announcement was seen as a response to rival PPG Industries’ (Pittsburgh) repeated attempts at a takeover, which began in March 2017 and were at times contentious.

Private Sale

Until Tuesday's announcement, it was unclear whether the separation would take the form of a sale or a demerger. According to AkznoNobel, its Board of Management and the Supervisory Board concluded that a private sale of the Specialty Chemicals business to The Carlyle Group and GIC was in the best interest of the company and Specialty Chemicals itself, along with respective stakeholders.

"Today is a key milestone in creating two focused, high performing businesses, to generate value for all stakeholders,” said Thierry Vanlancker, CEO of AkzoNobel. “We delivered on our commitment to separate the Specialty Chemicals business and did so ahead of schedule.

"We are very pleased to announce the sale of Specialty Chemicals to The Carlyle Group and GIC. We believe the business is well positioned to capture growth opportunities and further improve performance. Carlyle has significant experience in the chemicals industry and a proven track record when it comes to health, safety, innovation and sustainability."

AkzoNobel Centre

AkzoNobel says after the separation, it will remain one of the three largest paints and coatings companies in the world.

The Carlyle Group, a global alternative asset manager, reported deploying $22 billion into new investments in 2017, as well as raising $43 billion of capital across the platform. According to Carlyle, total balance sheet assets were $12 billion as of Dec. 31, 2017.

AkzoNobel expects 7.5 billion euros in net proceeds from the sale, with the 10.1 billion euros valuation including debt. Vanlancker told Reuters that the 7.5 billion euros would be returned to shareholders. From there, the company will determine distribution through dividends or share buybacks in the coming months.

Focused on Coatings

According to Vanlancker, the deal leaves Akzo as “one of the top [three] largest paints and coatings companies in the world.”

"Specialty Chemicals is a strong and profitable business with highly skilled and motivated employees serving our customers every day with essential chemistry,” noted AkzoNobel Specialty Chemicals CEO Werner Fuhrmann. “As a focused chemicals company we will concentrate our efforts and resources to accelerate profitable growth.

"With this transaction, our business has an opportunity to achieve its full potential and we will continue to fulfil the current and future needs of our customers throughout the world."

Though listed as discontinued operations in its year-end report for 2017, AkzoNobel did list numbers for its Specialty Chemicals division and noted that revenue was up 4 percent (4.9 billion euros over 4.8 billion), volumes were up by 3 percent and EBIT was up 10 percent.

The transaction is still subject to customary closing conditions as well as relevant regulatory approvals. AkzoNobel acquired shareholder approval for the separation at the Extraordinary General Meeting held on Nov. 30, 2017.

   

Tagged categories: Acquisitions; AkzoNobel; Business matters; Coatings raw materials manufacturers; Finance

Comment Join the Conversation:

Sign in to our community to add your comments.

Advertisements
 
Novatek Corporation
 
Novatek Portable Air Filtration Systems
 
Air Scrubbers/Negative Air machines for restoration, abatement, dust & odor control, hazardous contaminant removal from job sites to clean rooms and hospitals. Portable, affordable!
 

 
Keim Mineral Coatings
 
Mineral Silicate Paints + Stains Fuse to Concrete
 
• Forms permanent chemical bonds
• Becomes part of the concrete
• Will never peel
• Looks completely natural
 

 
Shield Industries, Inc
 
FireGuard® E-84 Intumescent Coating - Shield Industries, Inc
 
Trust the certified protection of the industry’s most innovative intumescent coating FireGuard® E-84 to provide you with the 1 and 2 hour fire ratings you need.
 

 
 
 

Technology Publishing Co., 1501 Reedsdale Street, Suite 2008, Pittsburgh, PA 15233

TEL 1-412-431-8300  • FAX  1-412-431-5428  •  EMAIL webmaster@durabilityanddesign.com


The Technology Publishing Network

Durability + Design PaintSquare the Journal of Protective Coatings & Linings Paint BidTracker

 

© Copyright 2012-2018, Technology Publishing Co., All rights reserved