BASF is looking to divest its Construction Chemicals business or find a “strong partner,” new CEO Martin Brudermüller said during a conference call with journalists to present results for this year’s third quarter. A deal is expected to be concluded sometime next year.

Amid strong competition from other interested companies, BASF bought the business with current annual sales of €2.4 billion and 7,000 employees from Evonik predecessor Degussa in 2006 for €2.7 billion including debt. The deal was one of a string of M&A transactions in the mid-2000s under former CEO Jürgen Hambrecht.

On the whole, construction chemicals have seen “good growth” this year, but Brudermüller said the BASF unit, world’s largest producer of admixtures for concrete, is too small to stand alone over the longer term especially as the industry is undergoing consolidation.

Chief financial officer Hans-Ulrich Engel added that the business has a “very low” degree of integration into the BASF network and what’s more does not fully meet management’s expectations in terms of earnings.

In view of the ongoing process of consolidation in the construction chemicals sector, the aim of any deal, Engel said, would be to establish a strong player.

Although management has declined to name earnings figures for the business, analysts said profitability has not improved since the acquisition more than 10 years ago. Under Degussa’s management, the activities reported annual EBIT of around EUR 200m.

One analyst, Markus Meyer of Baader Helvea, told the news agency Reuters he thought potential buyers might be prepared to pay up to €3 billion for the unit; however, it might also fetch only €2.4 billion. He named Sika, GCP or LafargeHolcim as prospective partners.

The sale or partnership for construction chemicals is one of several portfolio reviews in progress at BASF in response to a combination of negative factors the chemical industry is currently facing. Brudermüller plans to outline his forward strategy in more detail at a news conference on Nov. 20.

In the third quarter, despite an 8% rise in sales to €15.6 billion on higher volumes and selling prices, group earnings figures pointed downward. EBIT before special items fell 14% to €15.6 billion, due mainly to a lower contribution from the Chemicals segment. EBITDA sank by 18% to €2.2 billion and net profit by 10% to €1.2 billion.