Solvay and Ineos to create Inovyn
Solvay and Ineos have signed a definitive agreement to create a new player in chlorovinyls, to be named Inovyn. The joint venture is expected to be effective by year-end following the divestments required by the European Commission. Until completion, Solvay and Ineos will continue to run their businesses separately. To be headquartered in London, Inovyn will have proforma 2013 sales of more than € 3 billion, with 14 sites in eight European countries. Governance will be split equally between the partners.
"Thanks to this agreement we now have a unique opportunity to create a world- class competitive player with high-quality assets and substantial synergies, better able to withstand the challenging environment in Europe," said Jean-Pierre Clamadieu, CEO of Solvay. "This is another key step in the transformation of Solvay's business profile."
The terms of the joint venture agreement have been simplified and adjusted to the remedies as well as challenging market conditions. Solvay will receive an upfront payment of € 175 million at closing and transfer liabilities worth € 250 million into the joint venture.
It will exit Inovyn after three years, when Solvay will receive additional cash proceeds targeted at € 250 million. These final cash proceeds at exit will be adjusted based on the joint venture's average REBITDA performance during its three-year period, with a minimum exit payment of € 75 million.