Arkema Takes Majority Stake in PI Advanced Materials

30.06.2023 - French specialty chemicals company Arkema plans to acquire the 54% majority stake held by Glenwood Private Equity in South Korea-listed PI Advanced Materials (PIAM) for €728 million and fully consolidate the holding. The remaining 46% of equity will continue to be listed in South Korea.

The all-cash deal, which CEO Thierry Le Hénaff said will accelerate Arkema’s drive to become a pure-play specialty materials player, is expected to complete by the end of this year following approval by Chinese and Korean antitrust authorities.

The Paris-based chemical company expects the transaction to deliver “significant pre-tax synergies” of an estimated €30 million at the EBITDA level, which it said “should be progressively achieved within the next five years with a limited requirement for additional capital expenditure.”

Le Hénaff said the purchase of the acknowledged global leader in high-margin polyimide films for flexible printed circuit boards and graphite sheets for mobile devices as well as electric vehicles with a market share of 30% will strengthen Arkema’s Advanced Materials segment following the divestment of the PMMA activities, the acquisition of Ashland adhesives and the start-up of the company’s bio PA 11 plant in Singapore.

In addition, acquiring an Asian player with “unique technological positioning, state of the art manufacturing facilities and invaluable customer relationships “ is fully aligned with the French player’s strategy to be at the forefront of high performance materials for high growth end-markets supported by megatrends such as electric vehicles and advanced electronics, the CEO added.

PIAM last reported sales growth of 12% to more than €200 million, despite destocking in the consumer electronics market, and an EBITDA margin of around 30%.

Backed by a capital spending program of around €100 million, analysts expect the high-end plastics maker’s sales to grow at a rate of 13% annually, driven by growth applications such as lithium-ion batteries, 5G antennas, high resolution OLED displays or flexible screens and supported by recent capacity expansions.

Author: Dede Williams, Freelance Journalist