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AkzoNobel Completes Specialty Chemicals Sale

Tuesday, October 2, 2018

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Global coatings manufacturer AkzoNobel (Amsterdam) announced Monday (Oct. 1) that it has completed of the sale of its Specialty Chemicals business to The Carlyle Group and Singapore’s sovereign wealth fund GIC, concluding a process that has been ongoing for a year-and-a-half.

The 10.1 billion euro ($12.5 billion) deal resulted in what the company has labeled two focused businesses: AkzoNobel Paints and Coatings, and Specialty Chemicals, now owned by Carlyle and GIC.

Selling Specialty Chemicals

In its original announcement on the matter in April 2017, the global coatings manufacturer detailed that its plan was to sell or list Specialty Chemicals (which accounted for about a third of AkzoNobel's 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.

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.

AkzoNobel

Concluding a year-and-a-half long process, global coatings manufacturer AkzoNobel (Amsterdam) announced Monday (Oct. 1) the completion of the sale of the Specialty Chemicals business to The Carlyle Group and Singapore’s sovereign wealth fund GIC.

Previously, it was unclear whether the separation would take the form of a sale or a demerger. According to AkzoNobel, 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.

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.

Closing the Deal

AkzoNobel will be returning the majority of net proceeds from the sale of Specialty Chemicals to its shareholders, in compliance with the Extraordinary General Meeting held at the end of November 2017. Werner Fuhrmann, CEO of Specialty Chemicals, returned from retirement in August of that same year to help guide the business sale.

With the finalization of the sale, Fuhrmann will be returning to retirement, and Charles Shaver is to take his place. Shaver stepped down as CEO of Axalta in early September, but kept his role as chairman of the board. Previously, Shaver served as Chief Executive Officer and President of the TPC Group, his career also including a number of roles with General Chemical, Arch Chemicals and the Dow Chemical Company.

“I am delighted to assume my new role at Specialty Chemicals and look forward to working with the management team, Carlyle and GIC to deliver long-term success,” said Shaver.

“Specialty Chemicals has a strong global presence and a talented and dedicated team and I believe there is significant opportunity to drive additional growth through innovation and customer focus to build on the company’s leading positions in its markets.”

   

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

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