AkzoNobel announced the sale of 100 percent of its Specialty Chemicals business to The Carlyle Group and GIC for an enterprise value of €10.1 billion ($12.5 billion).
Amsterdam-based AkzoNobel said it expects to complete the transaction before the end of the year.
“The board of management and the supervisory board concluded that a private sale to The Carlyle Group and GIC is in the best interests of AkzoNobel, Specialty Chemicals and its respective stakeholders, including employees, shareholders and customers,” AkzoNobel said in a news release. “This is the outcome of a thorough dual-track process during which the boards of AkzoNobel carefully considered both a legal demerger and a private sale.”
The Carlyle Group has a global presence and the financial capacity to enable the Specialty Chemicals business to achieve its full potential, AkzoNobel noted.
“[This] is a key milestone in creating two focused, high-performing businesses, to generate value for all stakeholders,” AkzoNobel Thierry Vanlancker CEO said. “We delivered on our commitment to separate the Specialty Chemicals business and did so ahead of schedule. … We believe the business is well-positioned to capture growth opportunities and further improve performance. Carlyle has significant experience in the chemicals industry and a proven track record when it comes to health, safety, innovation and sustainability.”
The transaction values Specialty Chemicals at an enterprise value of €10.1 billion ($12.5 billion). On the basis of the year-end balance sheet, AkzoNobel said it expects to receive a cash payment of €8.9 billion ($10.9 billion). After deal- and separation-related costs, as well as other previously announced liabilities, the net proceeds are expected to be around €7.5 billion ($9.3 billion), according to AkzoNobel.
“We are pleased to invest in the Specialty Chemicals business and proud to support a business with such a strong heritage,” said Martin Sumner and Zeina Bain, managing directors at The Carlyle Group. “We are committed to growing the business, and building upon its innovation capability, high-quality work force and asset base, as well as its world-class sustainability and environmental practices. We look forward to working with the management team to transition the business to a successful independent company.”
The transaction is subject to customary closing conditions including the relevant regulatory approvals and consultation with the relevant employee representative bodies. AkzoNobel obtained shareholder approval for the separation at Nov. 30 meeting, the company noted.
“Specialty Chemicals is a strong and profitable business with highly skilled and motivated employees serving our customers every day with essential chemistry,” said Werner Fuhrmann, CEO of AkzoNobel Specialty Chemicals. “As a focused chemicals company, we will concentrate our efforts and resources to accelerate profitable growth. With this transaction, our business has an opportunity to achieve its full potential and we will continue to fulfill the current and future needs of our customers throughout the world.”
