Corporate Separation Solvay to Separate into Two Companies

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Chemical company Solvay plans to split into two independent, listed companies in the second half of 2023: Specialty Co is to operate as a pure specialty chemicals company with accelerated growth potential; Essential Co is to focus primarily on sustainable solutions as a supplier of basic chemicals.

Brussels/Belgium — According to plans announced by Solvay CEO Ilham Kadri, the group's activities will be split into two separate companies in the future: Essential Co will accordingly comprise the Chemicals business with soda ash (sodium carbonate), peroxide and silica, as well as the Special Chemicals business. These businesses generated net sales of around € 4.1 billion in 2021. Specialty Co comprises the Materials business, including Specialty Polymers, the High Performance Composites business, and the majority of the Solutions segment, including Novecare, Technology Solutions, Aroma Performance and Oil & Gas. These businesses generated combined net sales of around € 6 billion in 2021.

“The plan to separate into two leading companies represents a pivotal moment in our journey to transform and simplify Solvay. Since we first launched our Grow strategy in 2019, we have taken a number of actions to strengthen our financial and operational performance, focus our portfolio on higher growth and higher margin businesses, and reinforce our business purpose across the organization,“ Kadri said.

Essential Co would provide technologies for a number of attractive and resilient end markets including building, consumer goods and automotive. As an independent company, Essential Co is to be positioned to further reinforce its position through expansion and consolidation opportunities, including accelerating growth in natural soda ash and sodium bicarbonate, pursuing growth in the Asia-Pacific region and further extending its role in a consolidating peroxide market. It would also play a key role in accelerating the energy transition that began in its soda ash business in order to be carbon neutral before 2050.

Specialty Co will focus on sustainable solutions with growth potential and will consist of two business segments: Materials and Consumer & Resources. The former comprises materials and materials such as high-performance polymers and carbon fiber composites with a strong global position in all core markets. These businesses already have a strong track record and are benefiting from growth in areas such as electrification, lightweighting, sustainable mobility and digitalization.

The Consumer & Resources segment primarily consists of businesses within Solvay’s current Solutions segment and would be a market leader in providing specialty ingredients focused on more natural and sustainable solutions by anticipating rapidly evolving customer needs.

Under the separation plan, Solvay’s shareholders would retain their current shares of Solvay stock, which will continue to be listed on Euronext Brussels and Euronext Paris. The separation would be effected by means of a partial demerger of Solvay whereby the specialty businesses will be spun off to Specialty Co. Solvay shareholders at the time of separation would receive shares in Specialty Co pro rata to their shareholding in Solvay. The shares of each company would be expected to be listed on Euronext Brussels and Euronext Paris.

The composition of the Boards and management teams, as well as naming for each company, will be provided at a later date.

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