Comprehensive M&A data with integrated detailed company information

BASF looks to sell assets as it tries to gain EU approval for Solvay deal: Reuters
Posted on Wednesday, 09 January 2019 14:02
German chemical company BASF is awaiting the green light for a deal it announced in 2017 to acquire Solvay’s polyamide division and as such is exploring a number of sizeable asset sales, Reuters reported.

Citing people with knowledge of the matter, the news provider noted that one business potentially up for grabs is its plastics operations.

BASF is said to have hired Lazard to find a buyer for this asset and is hoping for a value of around EUR 450.00 million, including debt.

According to the sources, information packages regarding the plastics business were sent out before Christmas and first round bids are due before the end of the month.

News comes a day after official reports that Taiwan is investigating six current and former employees of BASF’s local operations that are suspected of leaking corporate secrets to a rival Chinese group.

The sales process is part of BASF’s plans to clear up concerns from the European Union (EU) in regards to the USD 1.60 billion acquisition of Solvay’s polyamide business.

Last year, Commissioner Margrethe Vestager said there are a limited number of companies that provide essential inputs to produce different nylon products; therefore, they will need to undertake a careful assessment to ensure the deal does not lead to high prices in the market.

The EU now has until 25th January to make a decision.

BASF is focused on expanding its nylon operations and enhancing its presence in Asia and South America via the deal with Solvay.

The latter, which is due to welcome its new chief executive Ilham Kadri later this year, is looking to offload high-volume units to streamline its businesses in the aerospace, automotive and oil and gas sectors.

Another option being weighed by BASF, according to Reuters’ insiders, includes excluding parts of Solvay’s European polyamide division from the list of assets it plans to acquire.

Furthermore, they added the group could also decide to leave out the manufacturing assets of the vendor’s intermediate and engineering plastics operations.

BASF plans to market the businesses it is planning to sell to companies that took part in the 2017 auction for the Solvay polyamide unit in 2017, the people noted.

SK Innovation, KingFa and SK Capital were among those interested at that time.

BASF’s assets – the ones being mooted for sale – generate core earnings of roughly EUR 60.00 million, the sources said, adding an enterprise value if expected to fetch between 7.0x and 8.0x that amount.

© Zephus Ltd