Germany: Agreement Reached Domo Acquires Solvay's European Polyamide Business
BASF, Solvay and Domo Chemicals agreed that Domo will acquire the European PA6.6 business from Solvay. This transaction is targeted to close by the end of 2019 and remains subject to the approval of the relevant competition authorities.
Ludwigshafen/Germany — To further expand its position as a global supplier of engineering plastics, BASF signed an agreement with Solvay in September 2017 on the acquisition of the latter’s integrated polyamide business. In January 2019, the EU Commission approved the acquisition subject to certain conditions, including the divestiture of Solvay’s polyamide 6.6 production facilities in Europe. To meet these requirements, Domo will no take over the European polyamide business.
BASF will acquire the global, non-European PA6.6 business including its 50 % share in Butachimie’s adipodinitrile (ADN) production according to the agreement signed in September 2017. Subject to the approval of the transaction between Domo and Solvay and final approval of the relevant competition authorities, the transaction between BASF and Solvay is also targeted to close by the end of 2019.
The intended acquisition by BASF now comprises a total of eight production sites in Germany, France, China, India, South Korea, Brazil and Mexico. In France, BASF and Domo will also enter into a joint venture to produce adipic acid. Furthermore, three research and development centers in South Korea, China and Brazil and six technical consultation centers in Asia as well as in North and South America will be transferred from Solvay to BASF.
The purchase price to be paid by BASF on a cash and debt-free basis would amount to $ 1.44 billion. The businesses to be acquired generated sales of around $ 1.1 billion in 2018. At closing, approximately 700 employees will move to the new owner. The intended joint venture between BASF and Domo in France will employ approximately 650 employees. The German group is planning to integrate the businesses into its Monomers and Performance Materials divisions.
With this transaction, BASF wants to benefit from improved access to important growth markets in Asia and South America, enabling the company to improve the close collaboration with local customers. Through the backward integration into important raw materials such as adipodinitrile (ADN), the chemicals company will be present along the entire value chain for polyamide 6.6 and be able to further increase the capacities to produce polymers.