Innovyn Starts, BASF Quits PVC
Headquartered in London, the new company has pro forma sales of more than €3 billion 4,300 employees and assets across 18 sites in Belgium, France, Germany, Italy, Norway, Spain, Sweden and the UK.
The two partners said final terms of the jv agreement remain “materially unchanged” from those announced a year ago, when the plans were first revealed. Upon closing, Solvay received an upfront cash payment of €150 million from Ineos, subject to customary adjustments such as actual working capital levels.
In addition to contributing its entire European chlorovinyl business, Solvay has transferred liabilities of around €260 million to the new company. When the Belgian group sells its stake to Ineos in 2018, as agreed, it is due to receive an additional, performance-based payment in the range of €95-280 million.
Simultaneously, BASF announced the sale of its 25% stake in its SolVin PVC joint venture with Solvay for an undisclosed sum, effective Jul. 1. As part of the deal, Inovyn has agreed to supply basic chemicals to BASF’S Antwerp, Belgium, site.
SolVin was established in 1999 as a 75-25 joint venture between Solvay and BASF. The German partner said at the time it intended to exit the business at some point in the future. Unclear is whether SolVin will be operated as a standalone company held by Inovyn or be absorbed by it.
Integration of the former Belgian-German jv is not known to have been included in the terms of the EU approval but the PVC producer would seem certain to be bound to Inovyn through supply agreements. At the latest when Solvay exits the business in 2018, full integration into Ineos would appear likely.
Commenting on the launch of Inovyn, Solvay CEO Jean-Pierre Clamadieu said the Belgian group’s transformation “has reached a key milestone.” Ineos chairman Jim Ratcliffe said the joint venture “combines two businesses with a strong heritage in the chlorovinyls industry, creating a company fit to thrive in an ever changing business environment.”