BASF and Solenis Signs Agreement to Combine Paper and Water Chemical Business - Papermart
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BASF and Solenis Signs Agreement to Combine Paper and Water Chemical Business

BASF and Solenis have joined forces by combining BASF’s paper wet-end and water chemicals business with Solenis. The combined pro-forma sale is targeted around EUR 2.4 billion.

June 3, 2018

BASF and Solenis Signs Agreement PM Vol19 No2 Jun Jul 2018
Customers to benefit from complementary range of products and services Solenis is a global producer of specialty chemicals for water intensive industries, including the pulp, paper, oil and gas, chemical processing, mining, biorefining, power and municipal markets.

The combined entity with pro-forma sales of around EUR 2.4 billion and around 5,000 employees in 2017, aims to deliver additional value for paper and water treatment customers. The goal is to create a customer-focused global solutions provider for the industry. For the paper industry, the product portfolio of the combined enterprise will cover the entire range of functional and process wet-end chemicals, solutions for the water cycle for paper mills, as well as comprehensive service capabilities. For the water treatment industry, the customers of the joint organization will benefit from Solenis’ high-quality service capabilities and BASF’s broad water treatment chemicals platform. Pending approval by the relevant authorities, closing is anticipated for the end of 2018 at the earliest. Financial terms of the transaction are not being disclosed.

BASF will hold a 49 percent share of the combined entity that will operate under the Solenis name and be headquartered in Wilmington, Delaware, USA. BASF will nominate three out of seven shareholder representatives of the joint entity that will continue to be led by current President and Chief Executive Officer John E. Panichella of Solenis 51 percent of the shares will be held by funds managed by Clayton, Dubilier & Rice.

The transaction comprises BASF’s global paper wet-end and water chemicals business with 2017 sales of around EUR 800 million and around 1,300 employees globally. The transfer includes production sites and plants of the paper wet-end and water chemicals business in Bradford and Grimsby, UK; Suffolk, Virginia, USA; Altamira, Mexico; Ankleshwar, India, and Kwinana, Australia. BASF’s paper and water chemicals production plants strongly embedded in the Verbund in Ludwigshafen, Germany, and Nanjing, China, are not transferred, and will deliver products and raw materials to the combined entity under mid- to long-term supply agreements.

BASF’s paper coating chemicals portfolio is not part of the transaction.

Strategic Fit for Future

Customers to benefit from complementary range of products and services Solenis is a global producer of specialty chemicals for water intensive industries, including the pulp, paper, oil and gas, chemical processing, mining, biorefining, power and municipal markets. The company’s product portfolio includes a broad array of process, functional and water treatment chemistries as well as state-of-the-art monitoring and control systems. Headquartered in Wilmington, Delaware, USA, the company has 35 manufacturing facilities strategically located around the globe with approximately 3,700 employees in 118 countries.

BASF offers a comprehensive range of chemicals for the paper and water industry. Its paper chemicals portfolio comprises dry strength agents, fixing agents, retention and drainage aids, flocculants and coagulants for water management. Furthermore, BASF offers basic dyes, direct dyes, sizing agents, pigment preparations, wet strength agents and color developers for thermal paper. The water chemicals portfolio includes products used in the key processes of industrial and municipal water treatment. BASF’s paper and water chemicals business supplies chemicals to purify the raw water used to produce drinking water, to treat waste water streams and industrial process water, to protect cooling towers, boilers and desalination plants. The paper and water chemicals business is part of BASF’s Performance Chemicals division reported in the Performance Products segment.

BASF and Solenis will continue to operate as strictly independent companies until the completion of the transaction.