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Lone Star in talks to pick up BASF’s construction chemicals unit
Posted on Thursday, 28 November 2019 12:48
Private equity investor Lone Star has entered exclusive negotiations to acquire the construction chemicals division of German chemicals maker BASF, people in the know told Reuters. According to the sources, the Ludwigshafen-headquartered firm is divesting the unit in order to concentrate on its more profitable activities. No financial details have been revealed at this time, but sources have previously valued the business at around EUR 3.00 billion. Reports of a sale of the construction chemicals division emerged in October 2018, when the firm said it was considering offloading the division as part of a strategic review of operations, with a view to reaching an agreement at some point during 2019. Since then, a number of prospective suitors have been named in connection with bids, including private equity firms Bain, Advent International and Carlyle, as well as building materials maker Compagnie de Saint Gobain and paints and coatings manufacturer RPM, among others. A spokesman for BASF has now told Reuters that talks are underway with a single bidder, but he stopped short of confirming that Lone Star is the remaining suitor and did not give any further information on the deal. Lone Star has so far declined to comment. BASF has owned the construction chemicals business since June 2006, when it paid EUR 2.80 billion to buy it from Degussa, the speciality chemicals maker now known as Evonik Degussa. Should a deal be announced, it would be the second unit the vendor has agreed to offload this year, according to Zephyr, the M&A database published by Bureau van Dijk. In August, it reached terms to sell its pigments business to DIC for EUR 1.15 billion. Completion is slated to follow during the fourth quarter of 2020. The construction chemicals division’s products are used to help customers adopt sustainable construction practices while growing profitably. Its output includes concrete admixtures, cement additives, waterproofing solutions and performance grouts, sold primarily under the Master Builders Solutions banner, as well as regional speciality brands like Watson Bowman Acme and PCI (Europe). © Zephus Ltd