AkzoNobel Sells Specialty Chemicals to Carlyle

27.03.2018 -

AkzoNobel has sold its Specialty Chemicals business to private equity investor Carlyle in partnership with GIC, the largest of Singapore’s sovereign wealth funds, for an enterprise value of €10.1 billion. Analysts said the price was in line with expectations.

A Dutch pension fund and German specialty chemicals producer Lanxess, in partnership with private equity group Apollo, along with a consortium of private equity investors Bain Capital and Advent International, had also been seen as interested.

Separating the chemicals activities from the company’s larger paints and coatings portfolio was proposed by management during its pushback against the €26 billion hostile takeover bid by US rival coatings PPG last spring and approved by shareholders at the end of 2017.

The Dutch group called the sale, due to complete before the end of 2018 following all approvals, a key milestone in creating a focused, high performing paints and coatings company and said it would unleash the chemicals business to achieve its full potential.

CEO Thierry Vanlancker said management believes the decision to sell rather than demerge and operate separately, as also had been considered, is the ”best outcome” for employees, shareholders and customers. “We delivered on our commitment to separate the Specialty Chemicals business and did so ahead of schedule,” Vanlancker said, while stressing once again that the “vast majority” of net proceeds from the transaction will be returned to shareholders. Akzo expects to receive a cash payment of €8.9 billion, with net proceeds of around €7.5 billion following deduction of costs and liabilities.

The Carlyle Group, according to Vanlancker, has a global presence and the financial capacity to enable the Specialty Chemicals business achieve its full potential. "Carlyle has significant experience in the chemicals industry and a proven track record when it comes to health, safety, innovation and sustainability”, Vanlancker added.